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Inflation decelerated again in June, providing welcome relief to consumers. The Bureau of Labor Statistics reported that the consumer price index rose by 3% in June 2024 compared to the previous year, down from a 3.3% annual rate in May. This marks significant progress from the peak of about 9% two years ago.
Despite the political rhetoric during the recent U.S. presidential debate, where President Joe Biden and former President Donald Trump blamed each other for inflation, economists emphasize that the causes of inflation are more complex.
Global events beyond the control of either administration played a significant role in driving inflation. Disruptions from the COVID-19 pandemic and the Russian war in Ukraine severely affected supply chains and market dynamics, leading to increased prices.
The Federal Reserve, operating independently from the presidency, was also slow to react to rising inflation, contributing to the prolonged period of high prices. Policies enacted by both Biden and Trump, including pandemic relief packages, had some inflationary effects but were not the primary drivers.
Economists agree that high inflation is largely a result of global supply and demand imbalances rather than the direct actions of any single administration.
