Can it be tamed by federal policymakers?


U.S. inflation is near its highest level in four decades, fueled by rising food, housing and energy costs plaguing economies globally. Gasoline prices hit a record $5 a gallon in June. They soon subsided, but inflation overall still runs four times the 2 percent rate economists want. Inflation remains the top economic issue and, with fall’s midterm elections approaching, a top political one. Policymakers trying to tame it face events largely beyond their control: a pandemic and Russia’s invasion of Ukraine. These breed supply shortages that raise costs even as the U.S. economy runs strong, with unemployment at 50-year lows and consumer spending steady. The Federal Reserve has raised interest rates to make borrowing costlier in the hope of slowing demand. Will it overshoot, sparking a recession and job loss while failing to increase supplies?

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