Consumer-price inflation rose to 8.6% in May, its highest rate in 40 years. This tax on homes and businesses is a threat to the economy. The Federal Reserve runs the risk of compounding a string of recent errors by being too tentative in raising rates. The Fed needs to act decisively to hold on to inflation and inflation expectations.
The situation is serious. Rising inflation is outpacing wage growth and reducing the real purchasing power of American consumers. The people belonging to the middle and low income groups have suffered the most. Inflation-related concerns have cut a large portion from stock- and bond-market values, reducing household net worth. The University of Michigan Consumer Sentiment Index has fallen to its lowest level in 50 years.
opinion | Inflation calls for bold Fed action
Consumer-price inflation rose to 8.6% in May, its highest rate in 40 years. This tax on homes and businesses is a threat to the economy. The Federal Reserve runs the risk of compounding a string of recent errors by being too tentative in raising rates. The Fed needs to act decisively to hold on to inflation and inflation expectations.
The situation is serious. Rising inflation is outpacing wage growth and reducing the real purchasing power of American consumers. The people belonging to the middle and low income groups have suffered the most. Inflation-related concerns have cut a large portion from stock- and bond-market values, reducing household net worth. The University of Michigan Consumer Sentiment Index has fallen to its lowest level in 50 years.