Twitter saw “My 401k” trending at the beginning of the week as the stock market continued to suffer steep losses in 2022. The consumer price index inflation numbers released on Wednesday only added fuel to the fire.
The Dow Jones industrial index was down at Wednesday’s open by more than 12% since the start of the year. The tech-heavy Nasdaq Composite was down by around 26.5% over the same period. Bitcoin was off almost 38% year-to-date.
Rep. Jim Jordan (R-OH) posted a tweet on Monday that simply said, “Your 401k misses President Trump.”
The downturn in the market during the early part of the week was due at least in part to the Federal Reserve’s move to hike interest rates last week. The interest bump was deemed necessary to combat the surging inflation that has hammered the American economy throughout the Biden administration.
Biden’s Treasury Secretary Janet Yellen admitted last week that the administration’s massive spending policies were a factor contributing to continuing inflation. However, she maintained the administration’s claim that the economy is “strong.”
As the national GDP contracted by 1.4% over the first quarter of this year, many economists now warn of the possibility of stagflation, defined as a combination of recession and price inflation during the same period.
On Wednesday morning, the Bureau of Labor Statistics released Consumer Price Index (CPI) data for April. Prices rose at a slightly slower rate than in March, although inflation remains at a 40-year high.
The CPI rose 8.3% on an annual rate last month, down from 8.5% in March. Economists had predicted the number would come in at 8.1%.
Much of the small decrease in April’s rate was due to fluctuations in the volatile energy market. Although gas prices moderated somewhat last month, they have gone back up in May. The national average price for a gallon of gas stood at $4.41 on Wednesday, up almost 20 cents in just the last week.
Housing, food, and new vehicle prices all increased during April. At home food costs went up 10.8% on an annual basis last month.
Things are getting out of control, but the Biden administration is happy to tell us it’s just raining.