Biden inflation and economic woes unlikely to be fixed in time for midterm elections

Inflation has soared. Consumer prices grew 7% in the 12 months ending in December, the fastest pace since 1982. Because of the inflation, the Federal Reserve is gearing up to hike interest rates several times this year and appears on track to be even more hawkish in its 2022 monetary policy than was thought even just weeks ago.

The high inflation has provided Republicans the opportunity to bash Democrats for spending so much during Biden’s first term.

But even if the rate hikes succeed in driving down prices before November, the administration might have to deal with the deleterious economic effects that rising rates bring in the run-up to the election.

Desmond Lachman, a senior fellow at the American Enterprise Institute, noted that the mere mention of increased interest rates can spook the markets. He said the administration is facing two problems: The first is that inflation is running too hot, and the second is that there are bubbles destined to burst that have been fed by interest rates being so low for so long.