The US is heading into a new era of elevated inflation that’s likely to persist long after the red-hot prices of the past year or so come off the boil.

Deep-seated trends in trade and demographics helped keep inflation in a comfort zone for decades, but both are now pushing in the opposite direction. Globalization was fraying even before pandemic and war made things worse. Growth in the world’s labor force has slowed.

Then there’s the looming cost of transition to net-zero carbon emissions -- likely to push all kinds of prices higher in the years ahead -– and the prospect of a sustained run-up in rents due to America’s dearth of affordable housing.

It all adds up to a changed landscape. Yes, inflation probably will retreat from near four-decade highs, as supply-chain snafus unwind and economic growth slows in response to interest-rate increases by the Federal Reserve. But it may prove stubbornly higher than the 1.5%-to-2% range that American consumers, businesses and investors grew accustomed to before the pandemic spike. (Bloomberg – Continue Reading)

President Biden is boxed in by high inflation, leaving him with few options to take the heat off on an issue that is hurting his party politically.

Biden has limited control over inflation beyond proposing policies and investments that could take months, if not years, to make an impact.

It’s also hard for the president to pass the buck on the matter.

The Federal Reserve is charged with handling inflation, and it is increasingly under scrutiny for moving too late to raise interest rates to take the heat off rising prices.

Blaming the Fed and its GOP chairman might be a normal move for a typical Democratic president.

But it would be a tough one for Biden to pull off. (Hill – Continue Reading)