The high cost of living is the biggest problem in today’s economy. Prices of everything from new cars to full-service meals rose at the fastest pace on record in December.
High inflation is largely a consequence of Covid. Demand has surged as the economy recovers from the pandemic, but supply simply can’t keep up — in part because of Covid-related supply bottlenecks.
2.) The worker shortage is contributing to the high cost of living. Beyond Build Back Better, what additional plans does the Biden administration have to fill vacant jobs? What about ramping up immigration?
The Build Back Better Act could have helped address the worker shortage by making childcare more affordable. That may have encouraged moms and dads to get into — or back into — the workforce.
3.) Not even two months after Biden tapped the Strategic Petroleum Reserve, oil prices climbed to fresh seven-year highs. Doesn’t that show that the SPR wasn’t a real solution? What steps is the administration considering to contain gas prices now?
Rising geopolitical tensions have been driving up crude prices in recent days. The potential of a Russian invasion of Ukraine, which the White House has warned might happen at any moment, could send prices much higher. It isn’t clear what, if any, contingency plans the Biden administration is making to cushion an oil shock triggered by a clash between Russia and Ukraine.
4.) By many metrics, supply chains remain severely stressed. What is the administration’s plan to unclog them and ensure grocery store shelves remain stocked?
There have been glimmers of hope on the supply chain front, and yet the situation remains very challenging. That’s keeping pressure on prices.
In a research report earlier this month, Goldman Sachs said its congestion tracker remains at a level of 10 out of 10, indicating “fully bottlenecked” supply chains. Bank of America said logistics bottlenecks are “showing no signs of easing with US port congestion near record highs and North Europe hitting new highs.”
5.) The Federal Reserve plans to hike interest rates and end its bond buying stimulus program. Does the administration support the Fed’s plans? Is there concern these moves might slow the economy or roil financial markets?
Biden, who has frequently said he respects the independence of the central bank, may not want to weigh in directly on Fed policy. But he could express confidence in the economy’s ability to adapt to a more aggressive Fed.
