Bidenomics at Work: Fed Chief Says Inflation 'Higher Than I Think Anybody Expected,' No Interest Rate Cut

As we’ve reported, the administration has backed off using the term “Bidenomics” because they found that the moniker wasn’t being received by the public with much enthusiasm. In fact, most Americans know that under Bidenomics, their quality of life has suffered with rampant inflation eating into their spending power and interest rates making borrowing painful.

See:

Team Biden Pulls Away From Touting 'Bidenomics.' It's About Time.

What Treasury Secretary Janet Yellen once called “transitory inflation” has turned out to be truly stubborn, and despite several interest hikes by the Federal Reserve, prices continue to shoot up.

Speaking at the annual general meeting of the Foreign Bankers’ Association in Amsterdam, Federal Reserve Chairman Jerome Powell said that despite their efforts, the inflation rate remains surprising.

“We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected,” Powell said. “What that has told us is that we’ll need to be patient and let restrictive policy do its work.”
While he expects inflation to come down through the year, he noted that hasn’t happened so far.
“I do think it’s really a question of keeping policy at the current rate for longer than had been thought,” he said.

I’m unclear what was "unexpected." The minute the $1.2 trillion Inflation Reduction Act was signed into law in 2022, anyone with thinking power knew that pumping such huge sums into the economy would increase inflation.

He also said ominously during the talk that the U.S. is headed in a fiscally unsustainable direction:

Jerome Powell - US fiscal policy is on an unsustainable path pic.twitter.com/zDl5ndXMdI
— Derrest (@DerrestWilliams) May 14, 2024

For all those suffering from the sky-high interest rates, which among other things make buying a house virtually impossible for many, it does not look as if help is on its way:

Jerome Powell on higher rates for longer. pic.twitter.com/yott0M98iF
— Derrest (@DerrestWilliams) May 14, 2024

See:

The Failing American Dream and the Fading Middle Class (VIP)

Powell indicated that he thinks the overnight borrowing rate will stay the same for the near future:

However, Powell also repeated that he does not expect the Fed to be raising rates.
The Fed has been holding its key overnight borrowing rate in a targeted range of 5.25%-5.5%. Though the rate has been there since July, it is the highest level in some 23 years.
“I don’t think that it’s likely, based on the data that we have, that the next move that we make would be a rate hike,” he said. “I think it’s more likely that we’ll be at a place where we hold the policy rate where it is.”

The president may have dropped the term "Bidenomics," but I think conservatives and Republicans should use it every chance they get to remind us who got us into this mess.

🚨Inflation is not going away. This is not good. Producer Price Index PPI up 0.5% in April, when expected up 0.3%, “core” PPI, up 0.5% also, when expected up 0.2%.

Where is Joe Biden?
Where is Jerome Powell?
Where is Janet Yellen? pic.twitter.com/9kLZXybLIp
— AJ Huber (@Huberton) May 14, 2024

Joe Biden Has Killed the American Dream

The Devil's Double Whammy: Inflation and Rising Interest Rates Impeding Home Ownership