A new report on Sunday highlighted concerns from top economists about the impacts of Democrat President Joe Biden’s massive government spending.
“Americans should brace themselves for several years of higher inflation than they’ve seen in decades, according to economists who expect the robust post-pandemic economic recovery to fuel brisk price increases for a while,” The Wall Street Journal reported. “The respondents on average now expect a widely followed measure of inflation, which excludes volatile food and energy components, to be up 3.2% in the fourth quarter of 2021 from a year before. They forecast the annual rise to recede to slightly less than 2.3% a year in 2022 and 2023. That would mean an average annual increase of 2.58% from 2021 through 2023, putting inflation at levels last seen in 1993.”
The report noted that inflation measures had jumped to their highest levels since the early 1990s and that the Biden administration may not raise rates until after the midterms to avoid more fallout at the polls from the administration’s policies.
Economists told the newspaper:
- Joel Naroff, chief economist at Naroff Economics LLC: “We’re in a transitional phase right now. We are transitioning to a higher period of inflation and interest rates than we’ve had over the last 20 years.”
- Diane Swonk, chief economist at Grant Thornton: “Inflation is expected to surge longer and longer—longer than the Fed previously thought. The Fed is now likely to raise rates in the first half of 2023, although some Fed presidents will be nipping at the bit to move sooner.”
- Kevin Swift, chief economist at the American Chemistry Council: “The danger is that monetary authorities are behind the curve. I’m not saying hyperinflation is around the corner, just that a lot of things have come together in the last year, and the overall trend of costs across the board is growing faster than in the last five or 10 years.”
- Swift noted the havoc that inflation is having on the construction industry, saying: “It’s disruptive—you can’t be sure of what your costs are, whether you can get supplies or what the costs will be six months from now. I’d hate to be in the construction business trying to bid on a job when you don’t know what the cost of steel will be 18 months from now.”
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