Inflation in the United States rose 8.6% in May from a year prior, the highest rate in four decades, according to a report released Friday.
Economists do expect inflation to ease this year, though not by very much; Goods prices are expected to fall in the coming months
High inflation has also forced the Federal Reserve into what will likely be the fastest series of interest rate hikes in three decades. By raising borrowing costs aggressively, the Fed hopes to cool spending and growth enough to curb inflation without tipping the economy into a recession. For the central bank, it will be a difficult balancing act.
Rampant inflation has posed a challenge to the Biden administration and Congressional Democrats, who are facing criticism from Republican opponents looking to retake the House and Senate in November, despite a robust jobs recovery from the COVID-19 pandemic. In a statement, President Joe Biden said that the report "underscores why I have made fighting inflation my top economic priority."
"My Administration will continue to do everything we can to lower prices for the American people," Biden said. "Congress must act urgently as well," calling for the legislature to send a bill lowering shipping costs to his desk "so we can lower the price of goods," as well as one that will "cut costs for families like energy bills and prescription drugs."
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