The Federal Reserve’s preferred measure of inflation — the personal consumption expenditure (PCE) index — came in at 0.3 percent in January, twice the Federal Reserve’s implied target of 0.17 percent, according to the Bureau of Economic Analysis. PCE inflation over the past year has totaled 2.5 percent and core PCE 2.6 percent, compared to the Federal Reserve’s target of 2 percent.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Today’s inflation print makes one thing clear: inflation is still not under control. Getting down to the 2 percent target is going to take more work from the Fed — and Congress can help by lowering deficits. With inflation and interest rates both elevated, further deficit spending would be economic malpractice.
The massive deficit-financed tax and spending bill that the House and Senate budget resolutions would allow is precisely the opposite of what the doctor is ordering here.
There is absolutely no good reason to borrow an extra $2.8 trillion over the next nine years, and today’s hot inflation numbers give another great reason not to go deeper into debt. Higher deficits from tax cuts and spending increases will only feed the flames of inflation. And they will further boost interest rates as well.
That means higher costs at the gas pump and the grocery store. And it means higher borrowing costs for students with loans, homebuyers with mortgages, and entrepreneurs starting a small business.
As for the taxpayer, every one percentage point increase in interest rates beyond projections also adds $3 trillion more to the debt over a decade – that’s a dangerous spiral we can’t afford.
Instead of throwing gasoline on the fire, we should be throwing water on it. That means reducing deficits and at a minimum paying for our priorities.
QUINNSCOMMENTARY 
AL LINDQUIST
of course we need to spend less and leave taxes alone especially not adopt the proposed “no tax on SS, tips, , and overtime”–the crisis will come when we have trouble selling our debt.
we learn that inflation is not caused by shortages–yes, eggs, as an example, are in short supply because of bird flu, but folks find substitutes–but egg prices are but a blip on the inflation screen–the Fed is the work horse here as the article tells us and it would be nice if Congress stopped increasing our deficit–
inflation is a monetary issue and the over reaction to covid along with all the deficit spending with al those new programs caused the presses to churn out $–now the new folks are not at all helping and the Fed could well engineer a recession which will have political repercussions.
inflation was not under control on January 20 and it is not today as we just read–come tomorrow without a sensible, rational plan that works to decease debt we will experience a crisis that that I do not want to see.
If the folks I voted for do not see this they will suffer the same fate as the loons on the left.
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I greatly appreciate the updates you send along like this one. It reconfirms that there are some sane people who are looking at these things and recognize the implications. Smith Smallwood
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