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The Fed Blows Up Biden’s 0% Inflation Ruse

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President Joe Biden delivers remarks on the drawdown of U.S. troops from Afghanistan, Thursday, July 8, 2021, in the East Room of the White House. (Official White House Photo by Hannah Foslien)

You may have heard Joe Biden touting “0% inflation” recently. He was making a big deal out of a month-to-month number no one normally talks about. His claims were confusing, and not given any context, and his press secretary refused to clarify them, even when asked to do so. The casual way the administration conflated these numbers to put themselves in a good light was alarming.

Meanwhile, when the Federal Reserve met last month, they were not as casual about inflation as Biden has been. The Daily Mail reports on the Fed’s real concerns about price increases, writing:

Federal Reserve officials saw ‘little evidence’ late last month that US inflation is easing and predicted it would remain elevated for ‘some time’, newly released minutes from July’s policy meeting show.

The minutes released on Wednesday showed policymakers committed to raising rates as high as necessary to bring inflation under control, and acknowledging that they would have accept lower economic growth for that to happen.

Inflation has been running hot and remained near a 40-year high at 8.5 percent in July, despite a rapid series of jumbo interest hikes that have taken the Fed’s policy rate from near zero to 2.5 percent.

The minutes from the July 26 to 27 policy meeting did not hint at a particular pace of future interest rate increases for future meetings, including the next one scheduled for late September.

Fed policymakers noted in the minutes that lower growth could ‘set the stage’ for inflation to gradually fall to the central bank’s two percent annual goal, though they acknowledged it remained ‘far above’ that target.

But the policymakers made clear that for now, they intend to continue raising rates enough to slow the economy.

Action Line: You can feel the inflation at your dinner table, and when you fill up your gas tank. Gas prices have come down, they say. Sure, but they’re still much higher than they were before Bidenflation hit. Investors need to pay attention to the effects heightened inflation will have on their portfolio and their cost of living in retirement. If you need help building a plan for investing in a world of higher inflation, let’s talk. If you want to get to know more about me in the meantime, click here to subscribe to my free monthly Survive & Thrive letter, and we’ll weather this storm together.

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P.S. Look at the chart below. Just because prices have come down slightly for gasoline is not a win for the Biden administration. Prices are still FAR higher than they were even in most of the Obama-era.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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