Gas prices reach all-time high, fueling inflation concerns

Gas prices hit a new all-time high Tuesday just two months after the last national record was set. According to AAA, the national gas average for May 10 is $4.37 per gallon, the highest ever recorded. Drivers are now paying $1.40 more per gallon than one year ago.

Drivers with diesel vehicles are feeling even more pain, paying $5.55 per gallon on average, which is also a national record. The new heights at the pump set the stage for new inflation numbers out Wednesday. Gas and energy prices have been big drivers behind inflation rates not seen in decades.

On Tuesday, President Joe Biden said inflation is his “top domestic priority” and claimed two things are to blame for painful prices: pandemic-caused supply chain issues and Russia’s war in Ukraine.

Many Republicans disagree and have been putting the blame on the Biden administration for failing to curb rising prices through policies.

“The most effective thing Joe Biden can do to solve the inflation crisis he created is resign,” Sen. Rick Scott (R-FL) said in a statement ahead of Biden’s speech.

After reaching a new 40-year high in March at 8.5%, economist consensus is that April’s consumer price index will be lower, at 8.1%. The good news is that would be the first sign that runaway inflation has peaked, but experts are worried the decline won’t be as fast as the Federal Reserve and Americans would like to see.

The Fed has twice raised its benchmark interest rate to curb inflation and is reducing its balance sheet, which ballooned during the COVID-19 pandemic as the Fed implemented easy monetary policies to promote economic strength.