Inflation Fight Requires Two-Pronged Approach: Fed Rate Hikes Not Enough

Inflation remains a pressing concern for American voters, and lawmakers are being called to account for their role in addressing it. The Consumer Price Index shows prices rising by 0.4% over the past month, with a significant increase of 3.4% over the last 12 months.

The Federal Reserve has increased interest rates to combat inflation, but its efforts can only go so far without fiscal discipline from Congress. According to Parker Sheppard, senior fellow at the Fiscal Lab on Capitol Hill, deficits are running at 6%, and trimming them by half will be crucial in keeping future debt sustainable.

Congress should commit to a credible deficit target, argues Sheppard, and restore expectations that future debt will remain manageable. Additionally, the Congressional Budget Office should include debt-service costs when scoring legislation, as current practices allow lawmakers to vote on proposals with artificially inflated revenue projections.