Sen. Rand Paul, R-Ky., predicted that inflation will reach double digits and that the U.S. economy will be in a recession, with growing unemployment.
"I wish I had better news, but we will get through this as a country," Paul said in a Facebook Live Q&A with constituents. "We're a strong, resilient country, strong, resilient people. We just have to get people in charge of our government who understand that we have to live within our means."
The consumer price index for April, a broad-based measure of prices for goods and services, increased 8.3% from a year ago, higher than the Dow Jones estimate for an 8.1% gain. That represented a slight ease from March’s peak but was still close to the highest level since the summer of 1982, CNBC reported. The May CPI is due to be announced on Friday.
During a Senate Finance Committee hearing, Treasury Secretary Janet Yellen said the United States is dealing with "unacceptable levels of inflation," but that she hoped price hikes will soon subside.
Paul said that after a series of mega spending bills to counter the COVID-19 economic, the pain is about to hit, The Washington Examiner reported.
Paul said high gas prices, increased mortgage rates, and unemployment will rise as a way to temper inflation eventually.
“Nobody knows the future. And this is my prediction,” Paul said. “I think we can go back to double-digit interest rates. I think that that's in our future, but I think a recession and high unemployment is, too, and that's the way inflation gets cured."
Paul was addressing a question from a real estate agent worried about higher interest rates impacting sales, the Washington Examiner reported.
“I think the Federal Reserve is going to keep putting them up a half a point every time they meet," Paul said. "I think that happens probably every four to six weeks until they reach the inflation rate and inflation rate is 8.5%, and we're closer to the Fed funds rate being around 3% or so.
"So you can see how there's still quite a bit of ways where interest rates are going to rise. And this is something people have to think about in making their plans,” he said, advising new buyers to lock in their best rate now.
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