U.S. Inflation Hits a 30-Year High as Fed Keeps QE and House Democrats Seek to Spend Almost $5 Trillion

The core personal consumption expenditures price index is a key inflation metric used by the Federal Reserve.

The inflation measure increased 3.6% in July 2021 from a year ago and tied the highest level in roughly 30 years.

Including volatile food and energy prices, the PCE index rose 4.2% year over year, up from 4% in June 2021 and the highest reading since January 1991.

The PCE index is viewed as a more accurate measure of inflation than the consumer price index as it tracks a broader range of goods and gives more weight to substitution.

The core index makes it easier to see the underlying inflation trend by excluding two categories - food and energy - where prices tend to swing up and down more dramatically and more often than other prices.

The Federal Reserve under Chair Jay Powell embarked on serious extensive QE policies once the COVID-19 pandemic infected the economy of the U.S. As the months rolled on, the Federal Reserve viewed inflation pressures as transitory.

Democrats See Chance to Pass Massive Spending Packages Before Mid-Term ElectionsOn August 24, 2021, in a 220-212 party-line vote, House Democrats passed a US$ 3.5 trillion budget resolution and advanced a US$ 1 trillion bi-partisan infrastructure bill.

https://www.swfinstitute.org/news/88058/u-s-inflation-hits-a-30-year-high-as-fed-keeps-qe-and-house-democrats-seek-to-spend-almost-5-trillion