Analysts warn that record level rise inflation may rock the US economy

Washington: – Inflation has flared up in the United States and analysts have warned that this could hit the country’s economy. The PCE and CPI indices, considered the crucial elements in the US economy, have reached record levels in the last 40 years. The possibility of this inflation reduction has been ruled out given the Russia-Ukraine conflict. Therefore, prices of fuel, food grain, and other essential commodities have significantly increased. Besides, the analysts have warned that the ‘Budget’ of the US population will crash. Experts blamed that the policies of the Biden administration are responsible for this inflation.

As per the information released by the US commerce department, there has been an increase of 6.1% in inflation in the current year. It is considered is the biggest increase since 1982. The Consumer Price Index, the indicator for the scope of inflation, also has risen by 7.5%. This increase also becomes the highest in the last four decades. The index has never reduced since Biden took over the reins of the United States. There has been a consistent increase in inflation for 14 successive months since November 2020.

The problems in the global supply chain, increase in the prices of fuel, steel and other raw materials and shortage of manpower resulting from the Coronavirus pandemic have contributed to the increasing inflation in the United States. But the analysts and economists have blamed the wrong policies of the Biden administration alongside these factors for fuelling inflation. Sanctions imposed against the US oil companies when the fuel prices are increasing and the massive spending worth millions of dollars for the provisions for social security have further fuelled the inflation.

Indications are that the inflation in the United States will increase further, riding on the Russia-Ukraine tension. The Federal Reserve will be forced to raise interest rates given this rising inflation. If this decision has to be taken, it would negatively affect the US economy. Analysts have warned that the effects could reflect even in the global economy, not only the United States. A few days ago, the Federal Reserve announced a debt burden of $30 trillion on the US economy. Analysts have expressed concerns that this increasing inflation and the debt burden will arrest the growth of the US economy.