by Harry Wilmerding
The price of goods throughout the economy rose at its fastest level in decades despite assurances from Federal Reserve Bank Chairman Jerome Powell earlier this month that the central bank would get inflation under control.
The personal consumption expenditures price index (PCE) surged 6.4% in February on a year-over-year basis, the fastest pace since January 1982, the Commerce Department announced Thursday. The Dow Jones estimate projected core PCE, which strips out food and gas, would increase by 5.5%.
“The Federal Reserve’s preferred inflation metric is at a four-decade high,” E.J. Antoni, a research fellow at the Heritage Foundation, told the Daily Caller News Foundation.”The last time inflation was running this hot, the Fed had interest rates over 13%, as opposed to today when they are at a quarter of a percent.”
“The Fed is laughably behind the curve, as they have been for essentially a year,” Antoni added.
The PCE Price Index rose 6.4% over the last year, the highest US inflation rate since 1982. What's the actual inflation rate? Well over 10%.
— Charlie Bilello (@charliebilello) March 31, 2022
Thursday’s PCE comes after the Fed has repeatedly told Americans that the central bank has all the necessary means to combat the widespread surge in inflation.
“We continue to expect inflation to decline over the course of the year as supply constraints ease and demand moderates because of the waning effects of fiscal support and the removal of monetary policy accommodation,” Federal Reserve Chairman Jerome Powell said to the Senate Banking Committee on March 3.
The Fed acknowledged on March 16 that inflation has increased at a faster than anticipated rate and pledged to hike interest rates by .25% to .50% to bring down prices.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run,” The Federal Open Market Committee said in a statement. “With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong.”
Powell also highlighted that inflation has run too high and assured that the central bank would “take the necessary steps to ensure a return to price stability” in a March 21 statement.
Meanwhile, Powell dismissed long-term inflation in August 2021, saying the broad-based inflation will soon ease.
“Inflation at these levels is, of course, a cause for concern,” Powell told CNBC. “But that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary.”
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Harry Wilmerding is a reporter at Daily Caller News Foundation.