Biden Is Betting Companies Will Solve Inflation
The private sector is uniquely capable of fixing supply-chain problems at the root of rising prices, unlike the 1970s oil crisis when the government had to jack up rates to cool demand.
We know what we need to do to unclog the ports.
Source: Bloomberg
The Federal Reserve has been patient in addressing inflation so far, even though policymakers and the general public are uncomfortable with the rate of price increases. Treasury Secretary Janet Yellen, formerly Federal Reserve chair, recently said that she expects inflation to fall to acceptable levels in the second half of 2022. It's looking as if the Biden administration believes inflation management is a job best left to the private sector rather than the government.
That was far from the case in the high-inflation 1970s when an energy crisis stoked fears about U.S. dependence on foreign oil. The current cycle is tied to supply chain disruptions, which the country is much better equipped to handle.