Benzinga - by Shanthi Rexaline, Benzinga Editor. Treasury Secretary Janet Yellen on Tuesday touted the virtues of the Inflation Reduction Act of 2022 enacted by President Joe Biden, in remarks ahead of its anniversary on Wednesday. Best-selling author Robert Kiyosaki took exception to her comments and delved into a host of problems the economy is facing.
What Happened: “Treasury Secretary Janet Yellen says the IRA Inflation Reduction Act is ‘turning point' in saving our planet, ‘what is she smoking?'” Kiyosaki asked.
The author of “Rich Dad, Poor Dad” also asked a series of questions regarding food prices, gas prices, business closures and mounting credit card debts. “Biden's team worst leaders in history,” he said.
Treasury Secretary Janet Yellin says the IRA Inflation Reduction Act is "turning point" in saving our planet, "what is she smoking?" Has she been food shopping lately? Has she filled her gas tank lately? How many businesses closing? How about credit card debt? Biden's team…— Robert Kiyosaki (@theRealKiyosaki) August 15, 2023
Why It's Important: Kiyosaki's comments come amid confounding signals the economy is emanating. After peaking in the summer of 2022, consumer price inflation has been slowly and steadily moving lower. Some components of the inflation basket, however, are seeing pricing pressure stubbornly remaining high.
Service price inflation is among the components that remain elevated. The year-over-year growth of food prices fell from a peak of 11.4% in Aug. 2022 to 4.9% in July 2023. Geopolitical factors, though are threatening a spike higher. Despite the thawing, the annual rate of core consumer price inflation was at 4.7% in July, way above the Fed’s target of 2%. Economists are of the view that higher inflation could be the new normal.
The nationwide average price of regular-grade gasoline is currently at $3.862, off the June 2022 peak of $5+. The recent increase in crude oil prices has led to some reversal in the downtrend. Detractors say the Biden administration artificially kept gas prices low by tampering with the strategic petroleum reserve.
In the corporate world, the focus on efficiency amid the uncertain economy has led to massive layoffs and business closures.
Recent data from the Federal Reserve showed outstanding credit card debt piled to a record high of $1.03 trillion in the second quarter. Americans living beyond their means should not come as a surprise but at least consumers are confident enough to splurge on purchases despite the economic condition.
One factor that should offer a ray of hope is a potential Federal Reserve rate pause and a pivot. Following a string of rate hikes the central has been implementing since March 2022, the fed funds rate is at a 22-year high of 5.25%-5.5%. Analysts and economists pin their hopes on an end to monetary policy tightening, which could relieve some pressure off the economy.
Read Next: Janet Yellen Explains Her Encounter With Magic Mushrooms During Recent Trip To China: ‘I Was Not Aware…’
Photo via Gage Skidmore on Flickr
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