State of the Union: Inflation is Biden’s ‘top priority’ as Fed eyes March rate hike
President Joe Biden faced a number of issues during his first term in office Address of the State of the Union on March 1st, from the ongoing COVID-19 pandemic to the Russian invasion of Ukraine. But the President said his “top priority” is getting inflation under control.
Consumer prices rose 7.5% annually in January, the highest inflation rate in 40 years and well above the Federal Reserve’s 2% target. As a result, “many families are living paycheck to paycheck, struggling to keep up with the rising costs of food, gas, housing and more,” Biden said.
During his speech, Biden unveiled a comprehensive economic plan to fight inflation by cutting the cost of prescription drugs, child care and energy without cutting American wages. He also relied on tax reform to fund his policies and “ensure that corporations and the wealthiest Americans start paying their fair share.”
“My anti-inflation plan will cut your expenses and reduce the deficit.”
Read on to learn more about the President’s plan to combat rising consumer prices and how you can reduce the impact of inflation on your finances. You can visit Credible to compare interest rates on a variety of financial products, from savings accounts to debt consolidation loans.
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Amid inflation, Biden is touting an economic plan to cut daily expenses
The president used his State of the Union address as a platform to push his economic agenda, saying his plan would lower prices on energy, childcare and prescription drugs. Here’s how the Biden administration plans to cut those costs:
Biden advocated doubling America’s clean energy production, lowering the price of electric vehicles (EVs) and offering tax credits to weather homes and businesses. He estimates that his climate protection plan would reduce a family’s energy bills by an average of $500 per year.
The $1 trillion bipartisan infrastructure bill passed by Congress in 2021 will support Biden’s goal of installing 500,000 electric vehicle charging stations by 2030. The Build Back Better Act, which has not yet garnered enough support in the Senate, would increase the EV tax credit to $12,500.
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Biden’s Build Back Better plan would limit childcare costs to 7% of a family’s household income and provide universal Pre-K to every 3- and 4-year-old. In addition, the extended child allowance and monthly payments would be extended. A recent study estimates that this would sustainably reduce child poverty.
“My plan will cut costs in half for most families and help parents, including millions of women who have left the workforce during the pandemic because they couldn’t afford childcare, get back to work,” Biden said.
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Biden suggested that lawmakers cap insulin costs to $35 a month and let Medicare negotiate lower prescription drug prices. He also wants to make certain changes to the American Rescue Plan permanent — this legislation lowered monthly health insurance premiums, increased tax credits and expanded financial assistance for Affordable Care Act policyholders.
Data shows that medical debt is the leading cause of bankruptcies. If you’re struggling with unpaid medical bills, you might consider getting a debt consolidation loan to pay down your debt and save money over time. You can visit Credible to compare debt consolidation loan rates for free without hurting your credit score.
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Fed plays “crucial role” in fighting inflation, plans rate hikes
Outlining his strategy to stabilize consumer prices in his State of the Union address, the President said the Federal Reserve “plays a crucial role in fighting inflation” through its economic policies.
While the Fed kept interest rates near zero during the coronavirus pandemic to boost the national economy, it plans to implement several rate hikes in 2022 to ease inflation. The central bank still plans to hike interest rates later in March, Fed Chair Jerome Powell told lawmakers on Wednesday.
News of impending Fed rate hikes has already caused interest rates on a range of financial products, notably mortgages, to rise. Average 30-year mortgage rates have risen from around 3% in November 2021 to almost 4% now. after Freddie Mac.
The Fed’s economic policies are also likely to cause interest rates on other consumer credit products, such as credit cards, to rise. This comes at a time when Americans are mounting their credit card debt at a record pace, data shows.
One way to combat rising interest rates amid inflation is to refinance your high-interest debt at a lower rate. For example, consolidating credit card debt with a fixed-rate personal loan can save some borrowers thousands of dollars over time.
Visit Credible to learn more about credit card consolidation and compare offers tailored to you.
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