Congressional Candidate and University of Chicago Economics Graduate, Niki Conforti, on Inflation
Congressional Candidate and University of Chicago Economics Graduate, Niki Conforti, on Inflation — As a candidate for Illinois’ 6th Congressional District, I see how inflation has adversely impacted the people of my District with higher prices for everyday items, like food and gas. The Federal Reserve’s and the White House’s lack of early action to these inflationary concerns has hurt the American people – and we will all pay the price for their inaction.
Inflation certainly has not been transitory, as Fed Chairman Yellen and the White House claimed it was early last year. In fact, it has gone on so long that it has woven itself into the fabric of our economy.
Even after finally recognizing that inflation was not transitory, the Fed waited 5 months to act. To make up for lost time, they finally rose interest rates by 50 basis points. An interest rate hike of this magnitude has not been seen since May 2000 – over 2 decades.
This long delay will force them to raise rates in larger increments and do so more often over the course of the year. Rapid consecutive rate hikes like this are tricky. While raising rates is the typical solution, doing so in a rapid fashion is a balancing act. It puts the economy at risk of slipping into recession, which many Economists now believe is inevitable.
Since inflation has gone on for so long, many other factors have now come into play that are putting upward pressure on inflation. Those include energy prices, supply chain issues, labor wage increases, and the higher price of raw materials.
Without this Administration aggressively addressing all factors with a full 360 approach, the Fed faces having to raise interest rates in a way that will jeopardize economic stability. Doing this at a time when the world food supply is at risk due to the war in Ukraine, putting even more upward pressure on prices, will create a perfect storm and jettison the USA into a difficult time where the American people will be the ones paying the price.
Congressional Candidate and University of Chicago Economics Graduate, Niki Conforti, on Inflation
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