Former Obama Advisor Makes Grim Prediction About Gas Prices, Inflation

Former counselor to the Treasury Secretary under the Obama administration, Steve Rattner, made a grim prediction Tuesday about the state of the economy while speaking on MSNBC’s “Morning Joe.”

Rattner predicted that gas prices wouldn’t fall under $3.50 “any time soon” and that inflation won’t reach 2% like the Fed hopes.

“Look, we are in the strangest economy of my lifetime … we’ve never had a pandemic, a shutdown, a reopening like this, all of the government stimulus that went on, everything the Fed did, all at the same time. And so, yes, the economy is behaving, to use a technical term, weirdly.”

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“In terms of the outlook, it’s — look, it’s hard to say. Oil prices — crude oil prices, which is obviously the most important ingredient in gasoline, seem to have stabilized, even gone up a little bit since they started — from their low point when they started dropping. And so, yes, we’ll get some relief at the gas station, but it’s not going back to $3 or $3.50 any time soon,” he said. (RELATED: ‘A Definite Slowdown’: Business Owners Say They’re Already Seeing Signs Of Recession)

“And you do have other prices that are continuing to rise. Prices for housing, prices for certain kinds of food, prices for manufactured goods that people are still buying are rising. And so, inflation is going, I think, to peak somewhere along here, but we’re obviously over 9%,” Rattner continued. “The question is, how far and how fast does it drop? And I don’t see it dropping down to anything like 2%, which is the Fed’s adamant goal, any time in the immediate or medium-term future, for that matter.”

The inflation rate hit 9.1% in June, marking the largest 12-month increase since November of 1981. Meanwhile, the Producer Price Index increased to 11.3%.

To combat rising inflation, the Federal Reserve is reportedly poised to raise the federal funds rate by 0.75% at the end of July.