Visualize this: you go into a Starbucks and take out five dollars to buy a coffee, but that five-dollar bill is not enough to cover this normal expense. Inflation is a huge hardship, causing the cost of your daily needs to escalate very high and quickly. These rising prices are negatively impacting many families and businesses. A remedy to this issue is monetary policy. To make the changes we want and need, we have to speak out to the Federal Reserve.
Do you notice when you’re going to the store that the prices are rising higher and higher each time? Inflation is the increase of prices over time. When inflation increased last month, the price of essentials rose, and families and businesses started to struggle. PBS.org states, “U.S. inflation accelerated last month as the cost of groceries, gasoline and rents rose, a disappointment for families and businesses struggling with higher costs and likely underscoring the Federal Reserve’s resolve to delay further interest rate cuts.” This indicates that rising prices are becoming an immense challenge for families, especially those already struggling. These prices have been rising for the past five years with no explanation to why. Some think it’s because of disruption in supply, and others think it’s because the operation costs are increasing too. According to Nerdwallet.com, “No single factor can explain why food is so much more expensive now than before the pandemic. Food prices, which are up 31% since 2019 remain high because of the combined impact of rising operating costs, supply-chain disruptions and corporate profits.” As a result, these rising prices have to stop. More and more people are struggling to keep up with these extortionate activities.
Inflation has to stop! One remedy to this issue is managing interest rates. This will reduce demand-fueled prices for necessary items. According to “Policies to reduce inflation from Economic Help,” “The primary policy for reducing inflation is monetary policy – in particular, raising interest rates reduces demand and helps to bring inflation under control.” This indicates that monetary policy can be a great way to eradicate the escalation of this immense predicament we are currently fighting. However, interest rates can have a negative impact on economics. When interest rates lower demand, then inflation will start to decrease.Too raise interest rates and lower inflation, we need to get the attention of the Federal Reserve.
Ultimately, inflation is a tremendous problem in the United States right now. A way to help out others and potentially yourself if you’re also facing this problem is monetary policy. This increases rates and helps control prices better. It is up to us to get the Federal Reserve to lower these prices.
