Granite State Times

The president of the Federal Reserve Bank of Atlanta recently said that the current ongoing trend of soaring inflation on the prices of common U.S. goods can no longer be considered transitory.

Raphael Bostic made the comment during an Oct. 12 speech at the Peterson Institute for International Economics. His opinion breaks with Fed leadership's opinion on inflation, and he remarked that inflation will last longer than expected, according to the Federal Reserve Bank of Atlanta. 

Jerome Powell, chair of the Federal Reserve of the U.S., has repeatedly asserted that inflation is temporary due to post-COVID-19 reopening of the economy and that the Fed has the tools to fight runaway inflation. But as inflation grows, with a 5.4% consumer price index (CPI) increase in September, this assertion is becoming harder to defend, according to Nasdaq. The September CPI increase is the largest year-over-year increase since January 1991, CNBC News reported. 

“I believe the evidence is mounting that price pressures have broadened beyond the handful of items most directly connected to supply chain issues or the reopening of the services sector,” Bostic said at the Peterson Institute for International Economics. “If we scrutinize that report, we see that three-quarters of the CPI consumer market basket rose at rates higher than 3% during August.”

Bostic concluded that this justifies adjusting the Fed’s emergency monetary policy. He is currently a voting member of the Federal Reserve’s monetary policy-setting Federal Open Market Committee, the body equipped to make such adjustments.

This staggering rise was driven mainly by significant jumps in fuel, food and housing prices. Since last year, the price of gas has increased by 42.1%, select grocery items by 10.5% and rent by 2.9%. During the same time period, wages grew by just 4.6%, meaning that on average, Americans’ purchasing power has dropped significantly. 

“The rise in shelter costs will exacerbate the negative financial impact so many households are feeling from higher prices,” Chief Bankrate Financial Analyst Greg McBride told CNBC.

As winter approaches, staying warm will be dramatically more costly this winter for Americans. Real Clear Politics reported that the prices of natural gas and propane have increased by 89% and nearly threefold, respectively. Before President Joe Biden took office, the U.S was energy-independent, contributing to the low costs during the previous administration. Compared to September's 5.4% year-over-year inflation rate, Trump left office maintaining a 1.6% average in his final six months.

Consumers can also expect supply shortages of key items during the coming months. CNBC News reports that consumer giants General Mills, Costco and Nike have warned that on top of supply shortages, prices will remain shockingly high for consumers. 

Keith Jelinek, managing director of the global retail practice at consulting firm Berkeley Research Group, told CNBC, “We’ve seen cost-of-goods increases, especially in apparel, also costs of inbound shipping with the costs of containers, increases with transportation, trucking to get into distribution centers. There’s only so much you can pass on to the consumer.”

A recent study published in the Cato Journal by the Cato Institute concluded that reckless spending through increasing American debts contributes to inflation considerably and will cause major economic issues in the months and years to come if nothing is done about it.

Cabinet departments are trying to eliminate problems in the supply chain that limit the availability of goods for businesses and consumers, which have fueled inflation. CNN News reports that Commerce Secretary Gina Raimondo, part of Biden's Supply Chain Disruptions Task Force, acknowledged that administration's efforts have been limited so far, but said, "On the margin, we've helped."

AP News reported that Biden recently announced a deal for the Port of Los Angeles to become a 24-hour, seven-day-a-week operation. The nighttime operations were arranged to help to break the logjam and reduce shipping delays on goods. Those logjams have been blamed, at least partially, for rising prices.

Democratic New Hampshire politicians have received criticism from concerned citizens on Twitter for neglecting to address the issue of inflation. One New New Hampshire resident wrote in an Oct. 6 Tweet: “Rep. Chris Pappas, gas prices and inflation on daily goods are out of control in New Hampshire, killing the middle class. What are you going to do to help New Hampshire citizens?”

An Oct. 13 Tweet from the New Hampshire Young Republicans reads: “Rep. Chris Pappas' political account has not tweeted about a federal issue once this month. You would think we would hear about the debt ceiling, the $3.5 trillion in new spending, inflation or the border crisis? Nope.”