On June 3, Vessen stated during a Senate Finance Committee hearing that "inflation is expected to be a short-term issue, but other economic indicators are very robust." He added, "We believe we have all the conditions in place for a very strong economy," and expressed confidence that temporarily elevated prices would decline again.
Vessen's comments come amid growing concerns about the impact of the Iran conflict on the U.S. economy and consumer prices. The blockade of the Strait of Hormuz by Iran has led to a more than 40% increase in gasoline and diesel prices.
According to an analysis by Brown University, U.S. consumers have incurred an additional burden of $53 billion (approximately 81 trillion won) in fuel costs since the outbreak of the war, averaging over $400 (about 610,000 won) per household.
Rising energy prices are also contributing to overall inflation. The Consumer Price Index (CPI) for April showed a 3.8% increase compared to the same month last year, marking the highest level in nearly three years since May 2023. The Personal Consumption Expenditures (PCE) price index also rose by 3.8% year-over-year, the highest since May 2023 (4.0%).
The Federal Reserve's June Beige Book report indicated that rising energy costs linked to the Middle East conflict are a major driver of inflationary pressures, affecting shipping, packaging, food, and fertilizer sectors. The Fed also noted reports of increased credit card usage, decreased visits to retail stores, and heightened demand for essentials, suggesting that consumers are cutting back on spending and focusing on necessary purchases due to rising price pressures.
However, Vessen argued that inflationary pressures are more limited compared to those during the administration of former President Joe Biden. He stated, "Since President Trump took office, food prices, what many people refer to as groceries, have only risen by 2.5%, which is half the annual increase seen during the Biden administration."
Nonetheless, recent trends show that food prices are again on the rise. In April, grocery store food prices increased by 2.9% compared to the previous year, the highest rate of increase since 2023, with prices for fruits and vegetables rising by 6.1%.
* This article has been translated by AI.
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