Food inflation especially, which has been at near-record highs, will not ease off, either.
According to Reuters, other factors are responsible as well, such as drought conditions, too much rain in some cases, and the continuing war between Ukraine and Russia, two countries that produce much of the world's grain.
"Rice and wheat stores likely won't be replenished in the first half of 2023. Edible oil supplies are down because of adverse weather in Latin America and Southeast Asia," the report said, adding:
Food prices climbed to record peaks in 2022. Import costs rose to hover around a $2 trillion record high. That hit millions of people worldwide, especially those already struggling with hunger and poverty.
Wheat jumped to an all-time high in March after Russia's invasion of key grain exporter Ukraine. The same was true of palm oil – while corn and soybeans climbed to a decade high.
Inflation earlier last year was hitting 9 percent and has since eased off somewhat but remained high at 7.1 percent last month. For the year, inflation averaged about 7.7 percent, taking massive bites out of family budgets. It was "a staggering 14% in the 20 months since President Biden was inaugurated," noted the New York Post in November, shortly after the midterm election results indicated that Republicans were going to take control of the House. "Real wages have fallen approximately 4%. And the stock market — even with a strong week — remains down 16% for the year."
"The Federal Reserve is doing the heavy-lifting on inflation, and has already hiked the federal funds rate from near-zero to nearly 4%. This has pushed up mortgage rates from 2.6% to 7.1%, and combined with rising house prices to double the monthly mortgage on a new median-priced home, from $1,148 to $2,445," the report continued.
That the GOP won partial control of Congress -- Democrats still control the Senate and Biden remains in the White House -- will be a good thing for inflation (and, indirectly, Biden as well), The Post noted further.
The outlet noted that the answer isn't to let the Fed clamp down so hard on lending that the economy tanks (which is actually happening already). A better solution, the report argues, is for the GOP-controlled House and Democrats in the Senate to work with Biden on the adoption of policies that will bring it down naturally.
"Yes, much of the inflation reflects an economic hangover from the pandemic. Yet President Biden and Democrats have actively driven prices higher through energy regulations, tariffs, Buy America rules, tightened ethanol mandates, Davis-Bacon rules raising construction costs, and restrictions on new building," the report noted.
The worst contributor to higher prices has been the historic spending spree by Biden and his party over the past couple of years, which added $4.8 trillion to the national debt. Spending at a time of heightened demand flooded the economy with dollars, thereby raising the prices on a diminished supply of goods and food. The result was easy for economists to predict: Higher prices.
"Republicans may not have produced a comprehensive anti-inflation agenda, but their most valuable weapon will be gridlock. While Biden has already enacted $4.8 trillion in new spending, he had proposed a staggering $11 trillion during his 2020 campaign. Any chance of enacting the final $6.2 trillion in remaining promises — digging the inflation and deficit ditch even deeper — is almost surely dead with a GOP House," The Post's report continued, adding that, "ironically," that outcome is probably the best for Biden.
Republicans may not be able to elect a Speaker -- embarrassing in and of itself -- but by denying Biden and Democrats their checkbook, inflation isn't likely to get worse, even if it doesn't improve.