Inflation in the US peaked at three decades

- Inflation is now hitting Americans too

- The Fed may raise interest rates to keep inflation in check

WASHINGTON: Inflation in the United States rose to a three-decade high of 7 percent in December from a year earlier. Rising prices for food, gas, rent, and other necessities have pushed up American households.

The post-epidemic recovery has led Americans to increase spending on cars, furniture and appliances, leading to higher inflation. In addition, the shortage of semiconductors and other parts has also played a significant role in inflation.

Gas prices have also risen. This price increase has absorbed the pay rise that Americans have received. Even those in the lower income group can now afford only basic or basic expenses.

Corona is currently the main concern of Americans, but now inflation is slowly taking its place. This has created a political challenge for President Biden and the Congressional Democrats. On Tuesday, Chair Jerome Powell told Congress he was ready to raise interest rates if he had to control high inflation. Fed Reserve officials said they could raise the rate to near zero this year. Many economists think the Fed could raise interest rates four times in 202.

Rising rates will make home, auto and appliance and business loans more expensive. It can slow down the economy. The Fed is rapidly closing its monthly bond-buying program. This has led to a reduction in long-term interest rates, which has encouraged borrowing and spending.