President Biden: Reversing rising inflation 'top priority for me'

President Joe Biden says he is prepared to go to battle with inflation, as government data confirms a pace of price increases not seen in decades.

The Bureau of Labor Statistics reported Wednesday morning that prices rose 6.2% on a year-over-year basis in October. A pace that fast has not been recorded on the Consumer Price Index since December 1990.

“Inflation hurts Americans' pocketbooks, and reversing this trend is a top priority for me,” Biden said in a statement after the CPI data release. The president said his nearly $2 trillion Build Back Better plan will be key to supporting the U.S. economy through the recovery, downplaying concerns it would further exacerbate inflation.

The CPI data, which showed prices rising 0.9% on a month-over-month basis, appeared to be boosted by higher prices at the pump. Gasoline prices rose by 6.1% just between September and October. Fuel oil prices rose 12.3%.

Biden said he has directed the National Economic Council to “further reduce” costs in the sector. He has also asked the Federal Trade Commission to “strike back at any market manipulation or price gouging in this sector.”

No longer transitory?

But underlying components in the CPI show prices rising for other types of major expenditures faced by Americans. The cost of food at home rose by 1.0% and shelter costs were up by 0.5%.

Policymakers at the Federal Reserve, the nation’s central bank, had brushed off higher inflationary prints as “transitory.” The idea: that COVID-related bottlenecks in the global supply chain (i.e. for microchips) would lead to temporary price spikes that would eventually pass.

[Read: What is ‘transitory’ inflation — Yahoo U]

Chip shortages, for example, led to a surge in used car and truck prices, making the category a common talking point for transitory inflation. But after months of price decreases that appeared to show signs that price pressures were indeed fading, October’s report showed price tags again increasing, by 2.5%.

The Fed, which has been pumping money into the economy through the COVID-19 crisis, is warning that high inflationary prints will likely last through new year's. This month, the Fed will take the first steps in paring back its stimulative policies — by slowing the pace of its bond purchases.

But the central bank has not messaged any intention to immediately raise interest rates. The Fed has pinned near-term borrowing costs at near-zero to support the pandemic recovery.

Inflation concerns are rising at the same time as the Biden administration’s deliberations over whether or not to replace Fed Chairman Jerome Powell, who joined the Fed as an Obama appointee but was tapped for the head job by Trump.

“I want to reemphasize my commitment to the independence of the Federal Reserve to monitor inflation, and take steps necessary to combat it,” Biden said in the statement.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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