**U.S. Inflation Hits 40-Year High, Beating Expectations**.
**Inflation in the United States surged to a 40-year high in December, exceeding economists’ expectations and putting further pressure on the Federal Reserve to accelerate the pace of interest rate hikes.**.
According to data released by the Bureau of Labor Statistics on Wednesday, the consumer price index (CPI), a widely followed measure of inflation, increased by 7% over the past 12 months, the largest annual gain since June 1982. The core CPI, which excludes volatile food and energy prices, rose by 5.5%, the highest level since February 1991..
The increase in inflation was driven by a surge in energy prices, which rose by 29.3% over the past year. Food prices also increased by 6.3%, the largest annual gain since March 2009..
The higher-than-expected inflation reading is likely to add to pressure on the Federal Reserve to raise interest rates more aggressively. The Fed has already begun to raise rates, with three hikes so far this year, and has signaled that it will continue to tighten monetary policy in an effort to bring inflation under control..
**The Fed’s aggressive rate hikes are likely to slow economic growth and could lead to a recession.** However, the Fed has said that it is committed to bringing inflation down to its target of 2%, even if it means sacrificing some economic growth..
**The high inflation rate is also putting a strain on American households, especially those with low incomes.** The rising cost of food, energy, and other necessities is making it difficult for many families to make ends meet..
**The Biden administration has come under fire for its handling of the economy, with critics blaming the president’s policies for the high inflation rate.** The administration has defended its record, saying that the economy is recovering from the COVID-19 pandemic and that the inflation rate is a global phenomenon..
**The high inflation rate is a major challenge for the U.S. economy and the Biden administration.** The Fed will need to carefully navigate the situation in order to bring inflation under control without causing a recession..
**Here are some additional key points from the inflation report:**.
* The increase in the CPI was driven by a surge in energy prices, which rose by 29.3% over the past year..
* Food prices also increased by 6.3%, the largest annual gain since March 2009..
* The core CPI, which excludes volatile food and energy prices, rose by 5.5%, the highest level since February 1991..
* The high inflation rate is putting a strain on American households, especially those with low incomes..
* The Biden administration has come under fire for its handling of the economy, with critics blaming the president’s policies for the high inflation rate..
* The Fed will need to carefully navigate the situation in order to bring inflation under control without causing a recession..
