How Biden Can Help the Fed Fight Inflation
Energy prices are part of the problem, and smart use of oil reserves can make a difference.
Ouch.
Photographer: Jim Watson/AFP via Getty Images
With U.S. inflation standing at a 40-year high of 7.9%, the Federal Reserve has finally begun to tighten monetary policy, with a small initial increase in interest rates and the promise of more to come. Getting inflation back under control won’t be easy — and the Fed shouldn’t be asked to do it all alone.
The soaring price of energy is compounding the problem. President Joe Biden’s recent announcement of a ban on imports of Russian oil, gas and coal helped push the benchmark price of oil to well over $100 a barrel at one point — and the effects of this most recent spike aren’t yet reflected in the inflation rate. As the war in Ukraine drags on, there might be worse to come. What can be done to mitigate the short-term inflationary pressure from mounting energy costs?