US Government Struggles to Control Prices Ahead of Midterm Elections
The US government is racing against time to control prices ahead of the midterm elections on November 3rd. Despite the Federal Reserve's efforts, inflation remains high, exceeding its 2% target. The sharp rise in oil prices due to the US-Iran conflict and global supply disruptions has driven up fuel costs, with diesel prices hitting a record high of $6.53 per gallon or approximately $1.73 per liter.
The Trump administration is trying various ways to reduce the cost of living, including increasing beef imports by 300,000 tons at a lower tariff rate. This move aims to increase supply and bring down prices by about 25%. However, livestock groups have expressed concerns that introducing large quantities of low-priced imported meat could lower livestock prices and discourage farmers from expanding their herds.
The government is also seeking to influence interest rates, which continue to rise despite the Fed's decision to raise them by 0.25 percentage points in September. The US Treasury Department has increased its long-term government bond purchases to improve liquidity and support the bond market, but the effect so far has been limited.
The White House is also considering restricting diesel exports to keep more fuel in the domestic market, but Energy Secretary Chris Wright has opposed a hard ban, warning that such a measure could force refineries to cut production and drive fuel prices even higher.