Biden's Gas Tax Holiday is Bad, But Good

June 23, 2022--Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--While President Joe Biden pushes for a gasoline tax holiday to help ease inflationary pressures, the U.S. Federal Reserve Bank of Dallas said prices at the pump may already be enough to cause the demand destruction necessary to offset current market trends.

Commodity prices are behind the bulk of inflation in the U.S. economy, which is running at a 40-year high. The national retail price for a gallon of regular unleaded gasoline set daily records for most of June, regularly topping $5 on average.

Commodity prices declined swiftly, however, after the U.S. Federal Reserve increased its interest rates by 75 basis points, which may slow the economy enough to cause a recession. West Texas Intermediate (WTI) , which hit an all-time high of $123.70 per barrel this year, lost major ground in the trading sessions that followed the Fed's announcement.