Gas prices hit two-decade high despite Federal Reserve’s anti-inflation efforts
The US economy is grappling with soaring gas prices, despite the Federal Reserve’s strategies to curb inflation. As of 2 October, Shell (LON:SHEL) petrol stations in Alhambra, California have seen prices exceeding $6.00 per gallon, marking a two-decade high. This surge is largely attributed to Brent crude oil prices, which have risen over 30% within the past three months.
Public sentiment towards the economy is often gauged through unemployment and inflation indicators. Following last year’s 40-year record inflation, it was expected that the Federal Reserve’s interest rate hike would help mitigate inflation and bolster economic confidence without triggering an increase in unemployment.
However, this has been complicated by a rise in interest rates, particularly at the end of the bond market’s yield curve which impacts mortgage rates. Structurally high interest rates, an issue that falls under the purview of Congress, have further compounded these challenges.
The narrative underscores the need for restoring economic confidence and managing price pressures amidst what appears to be a period of political stagnation. The escalating gas prices stand as a stark reminder of America’s economic woes, marked by unpredicted mortgage rate hikes that exacerbate public dissatisfaction. The situation calls for effective measures to address these issues and steer the economy towards stability.
