Congress Must Step Up to Combat Inflation

Despite the Federal Reserve's efforts to combat inflation, lawmakers are not doing their part in addressing the issue. The Consumer Price Index shows prices rising by 0.4% over the past month and 3.4% over the last 12 months.

The Fed can only do so much on its own, and it's time for Congress to step up and commit to a credible deficit target. This would help restore the expectation that future debt will be sustainable, which is crucial in bringing down inflation.

A new paper from the National Bureau of Economic Research highlights the personal impact of inflation on American workers. Between 2021 and 2024, firms handed out 3% cost-of-living raises, but 43% of workers who didn't change jobs saw a reduction in real wages, with most experiencing severe cuts.

The Trump administration and Congress have been criticized for not making inflation a clear priority. Instead of pressuring the Fed to lower interest rates, they should be working towards fiscal austerity and becoming serious about overspending.