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Inflation Rate Essay

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Inflation rate

In the future in my opinion prices for most goods will rise by mid 2013 and businesses will start to lose business due to the inflation. If prices were to start rising gas would rise with hyperinflation as it seems to consistently do. “Banks could choose to start drawing down those reserves and lending money to borrowers which would increase the amount of money in circulation (Newman).” The Fed could push inflation higher because, it’s a way of accelerating the pay down of burdensome levels of debt, such as the U.S. government. The most important thing is that if inflation gets higher it might force the Fed to abandon its target of an unemployment rate of 6.5 percent. Overall Personally I think inflation will not rise above two percent over the next few years.
This article is about the current U.S. inflation rate. The article is saying that inflation is basically nonexistent at the moment and that it has fallen toward the end of 2012 because, of energy prices. Overall, the annual rate of inflation is only about 1.8 percent, which is even less than the Fed's working target of 2 percent (Newman). “The Fed insists it can keep inflation under control, because it's not literally printing paper money and flushing it into the economy, where it can't rein it back in (Newman).” Instead, the Fed is creating money electronically, and so far, most of that has remained at the central bank itself. Inflation rate is an important economic indicator. It tells how fast prices are changing in the economy. It is measured by the consumer price index or CPI, which tracks the average price level in the United States. Basically inflation is a key measure of the health of an economy. If prices rise too fast then that is bad news for consumers and businesses. Moderate inflation is good for economic growth but, there are various factors that contribute to the rise in prices (Newman). Some are natural factors like unfavorable weather conditions which affect the food...

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