Inflation accelerated in July: The Federal Reserve’s preferred measure, the Personal Consumption Expenditures price index, rose 3.3% over one year earlier, up from June’s 3%.
That’s still below the peak of 7% last summer — but heading back up in the wrong direction.
Some claim it’s just a fluke. In fact, it’s most likely thanks to President Joe Biden’s new spending spree — care of the woefully misnamed “Inflation Reduction Act” kicking in — and means a whole new round of rising prices.
That law, as we noted at the time, actually increased federal spending, and the deficit, in the near-term.
It’s now widely acknowledged that the ginormous spending in Biden’s first big Democrats-only law, the “American Recovery Act” (also ill-named), triggered the inflationary spiral that began in early 2021.
So no surprise that another spending spree is again pushing inflation up.
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