Biden meets the Fed chair while inflation bites at wallets
WASHINGTON (AP) – President Joe Biden will meet with central bank governor Jerome Powell as soaring inflation takes a toll on Americans’ wallets.
The meeting on Tuesday will be the first since Biden nominated Powell to head the central bank and comes weeks after his confirmation for another term by the Senate.
The White House said the couple would discuss the state of the United States and the global economy and especially inflation.
“The most important thing we can do now to move from rapid recovery to steady, steady growth is to bring inflation down,”[ads1]; Biden said in an article published Monday by The Wall Street Journal. “That’s why I’ve made tackling inflation my top economic priority.”
Inflation in the United States reached a 40-year high earlier this year, amid supply chain constraints caused by the recovery of the global economy following the pandemic and Russia’s invasion of Ukraine.
But the economy saw a welcome bit of data on Friday, when the Ministry of Trade said that inflation rose 6.3% in April from a year earlier, the first decline since November 2020 and a sign that high prices can finally be moderated, at least for now.
The inflation rate was below the four-decade high of 6.6% set in March. Although high inflation continues to cause difficulties for millions of households, any slowdown in price increases, if it continues, will provide modest relief.
Powell has promised to continue raising the Fed’s short-term key interest rate to cool the economy until inflation “comes down in a clear and convincing way.” These interest rate hikes have spurred fears that the Fed, in its efforts to cut loans and spending, could push the economy into a recession. This concern has caused sharp falls in stock prices over the past two months, although markets rose last week.
Powell has signaled that the Fed is likely to raise its reference rate by half a point in both June and July – twice as much as the regular rate hike.
Biden signaled in his op-ed that the record pace of job creation in the wake of the pandemic would slow down dramatically, suggesting more moderate levels of 150,000 jobs per month from 500,000. He said “it will be a sign that we are succeeding. to move into the next phase of recovery – since this type of job growth is compatible with low unemployment and a healthy economy. “
Ahead of the meeting, Biden promised not to interfere in the Fed’s decision-making, but suggested that he and Powell be in line with dealing with inflation.
“My predecessor humiliated the Fed, and previous presidents have tried to influence decisions inappropriately during periods of high inflation,” Biden wrote. ‘I do not want to do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our biggest economic challenge right now. “
