Fed Fights Inflation, But Congress Needs to Act

The recent Consumer Price Index (CPI) shows prices rose 0.4% over the last month and 3.4% over the last 12 months, with oil and gas prices accounting for a substantial share of that increase.

A new study by the National Bureau of Economic Research found that nearly six years after the 'Great Inflation' began, overall prices continue to rise much faster than they should, and well above the Federal Reserve's 2% annual target.

The study analyzed payroll records for about 16 million American workers between 2021 and 2024 and found that firms were handing out customary 3% cost-of-living raises while 43% of workers who didn't change jobs endured reductions in real wages, most of which were severe.

Veronique de Rugy argues that the Federal Reserve can't bring inflation down for good unless lawmakers show they will back the debt with future fiscal surpluses by becoming serious about overspending and committing to a credible deficit target.