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Nov. 13, 2021, 10:32 a.m. EST

High inflation is eating up the budgets of American households

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By Jeffry Bartash

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For one thing, consumer confidence has fallen sharply in the past several months as Americans confront higher prices.

High inflation is also putting pressure on the Federal Reserve to reduce stimulus. Some critics contend that massive government pandemic spending and the central bank’s easy-money strategy have contributed to soaring prices.

Read: Fed still thinks surging U.S. inflation won’t last, but it’s now hedging its bets

“The price of food is where the public’s real-world perceptions of inflation most sharply come into conflict with fiscal and monetary policy,” said Nicholas Colas, co-founder of DataTrek Research.

The White House, for its part, is rushing to address the problem as Republicans ramp up attacks on Democratic policies that they blame for the spike in inflation. Persistently high inflation could cost the party control of Congress next year.

President Biden on Wednesday said he’s taking steps to try to ease inflation and limit the damage to his administration.

“Inflation hurts Americans pocketbooks, and reversing this trend is a top priority for me,” he said.

Economists predict high inflation will subside sometime next year once widespread shortages of supply and labor begin to ease, but it’s unclear how much or how quickly price pressures will fade.

Read: Small-business owners turn pessimistic as labor and supply shortages worsen

Companies can’t get enough materials — paper, aluminum, computer chips and so forth — or find enough workers to produce all the goods and services that customers want. These shortages have largely driven the surge in inflation.

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