Image provided by author. Top: High gas prices.
Great inflation is here. Prices are rising everywhere, from vehicles and electronic goods to even basic groceries. While inflation was always low at 2%, lingering in the background for many years, this current wave of inflation has become the highest in decades with the rate accelerating to 8.5% in March. It has been hitting nearly every sector of the economy in one way or another, and has sparked questions about what to do to get prices down to pre-2020 levels.
These concerns have even reached the minds of the Washington student body. Keshav Vijay, a junior at Washington high school, explained how inflation is scary for him, but he’ll set those fears aside for later in his life. “It’s probably not going to be good for our [overall] economy and it’s probably going to put my chances at financial success [lower] later but right now I don’t care,” he says. Another junior at Washington high school, Ashton Benedetti, expressed his feelings bluntly: “This inflation is seriously messing us up.”
Worries about inflation at Washington High School are reasonable, as all types of goods around us are increasing in prices. Typical groceries like meat, fruits, and vegetables have seen their prices go up by 8-13%. It’s enough for people to go over their budgets, resulting in many individuals and households gathering outside of already-straining food banks across the nation. Even students aspiring to have their own car or truck will experience the full brunt of inflation as used cars and trucks saw a 41% price increase. The price hike is significant enough to stop aspiring car owners.
The significant rise of prices is caused in part, but not solely, to demand-pull inflation and cost-push inflation. Demand-pull inflation occurs when demand for products in the economy is much higher than the supply of such products. An example of demand-pull inflation would be the hotel industry where due to consumers having more money and wanting to go on vacations, the demand for hotel rooms is increasing but the amount of hotel rooms in general would be staying the same. Cost-push inflation occurs when the prices jack up due to increased costs of wages and raw materials. Packaged food products are experiencing cost-push inflation, mainly due to rising ingredient costs. The gas industry, as is widely-known, is also experiencing cost-push inflation with gas prices in Fremont reaching $6 while in certain other countries the prices reach as high as $11 per gallon. Gas inflation recently is getting attention as soaring prices are due in part to the Ukrainian-Russian War, as many countries, including the US, are sanctioning Russian oil.
To combat this inflation, there has been talk of increasing interest rates. Already, Federal Reserve officials approved their first measure in years to increase interest rates to 0.5%. This is the first of a steady stream of additional rate increases which should help lessen the inflationary burden, though time will tell if these interest rates will make a big enough difference.
At the time of publication, the inflation rate is increasing at an average rate of around 8%. The rate might change in time though as the Feds indicate that the fight to combat inflation is going to be harder, as they forecast six more rate hikes in the future. The future can be seen as bleak as the soaring inflation seamlessly has no end.
Arthur Maung is a junior at Washington High School and has lived in the city of Fremont his entire life. This is his first year at the Hatchet, fully new to the paper. Arthur joined the paper to express his interests in anime and issues in Fremont. His hobbies include, but are not limited to, watching anime & Youtube, reading manga/manhwa, playing video games, and listening to music. After high-school Arthur plans to continue his education at Ohlone College, then transfer to any university to continue his education & adult life.