Inflation

NPR

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Inflation is hits another 40-year high. Older folks have seen worse : NPR

Jeanette Vecchio is 30, and everywhere she goes, she's feeling the pinch of something she hasn't experienced before in her life: high inflation.

The latest reminder came when she went to her favorite corner restaurant in Chicago where she loves the bread and butter.

"They're now charging for bread and butter," she says. "I was so devastated by it. But it's just another example of an increase across the board."

From restaurant meals to apartment rents, consumer prices have been climbing at the fastest pace in 40 years, meaning younger adults are witnessing the highest inflation of their lifetimes.

The Labor Department said Thursday that January prices were 7.5% higher than a year ago — the largest increase since 1982. Higher costs for food, shelter, and electricity were among the biggest drivers of inflation last month.

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With inflation still hot, the Fed takes a step towards rate hikes : NPR

The Federal Reserve is paving the way for possible interest rate hikes next year, in an effort to contain stubbornly high inflation.

At the conclusion of a two-day policy meeting Wednesday, the central bank announced plans to phase out its large-scale bond-buying program faster than initially planned. The Fed started purchasing bonds during the pandemic as a way to keep borrowing costs across the economy low and to prevent any market disruptions.

Ending the bond purchases earlier would give the Fed more flexibility to raise interest rates sooner, if necessary, to keep prices from spiraling out of control. The central bank said previously it wanted to stop its bond purchases before considering raising interest rates.

The Fed is taking a harder line against inflation after consumer prices in November jumped 6.8% from a year ago — the largest increase in nearly four decades.

In a statement, the Fed acknowledged the rapid runup in prices. Although the central bank still believes inflation is largely driven by factors tied to the pandemic, which should ease when the health outlook improves, policymakers are no longer taking that as a given.

NPR

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Inflation surges to its highest since 1990 : NPR

Surging prices are steadily chipping away at Americans' buying power – as well as President Biden's approval rating.

The Labor Department reported Wednesday that consumer prices were 6.2% higher in October than a year ago. That's the sharpest increase since November of 1990.

Price increases were widespread, with energy, shelter, food and vehicles all costing more. Excluding volatile food and energy costs, prices were up 4.6%

Much of the upward pressure on prices is the result of a mismatch between booming demand and limited supply, as businesses struggle to find both parts and workers.

Many employers have increased pay in order to attract more workers. But growing paychecks have quickly been eroded by the rising cost of gas and groceries.

Inflation, the monster that eats everything, good or bad 👹

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Inflation, the monster that eats everything, good or bad 👹

IInflation makes everything more expensive, meaning that people cannot afford as much and must cut back. Previously affordable things must be scaled back, regardless if such scaling back is good or bad.

Inflation encourages conservation and cutting of wasteful spending but at the same time not all spending is bad. It encourages smaller cars and more insulation. It encourages people to reevaluate their budgets and work to live more within their means. 

Inflation means that some very good government programs like college tuition programs or open space conservation will be killed off or reduced. Public programs often are victims of inflation as budgets are busted.