President Joe Biden met with Fed Chairman Jerome Powell at the White House to discuss rising inflation. Biden said that Powell drew attention to the “FED’s focus on inflation” during the meeting.
Biden said that he congratulated Jerome Powell, whom he nominated for a second term as chairman of the US Federal Reserve (FED), for receiving Senate approval. Biden said he promised Fed Chairman Powell space to do his job.
The Biden-Powell meeting coincided with a time when the US President was aiming to lower the prices of gasoline, food and consumer goods.
At a time when the global economy started to recover from the pandemic, inflation in the USA reached its highest level in the last 40 years at the beginning of this year, in the shadow of the supply chain problems that arose due to Russia’s invasion of Ukraine.
The US Secretary of the Treasury, Janet Yellen, who was the chairman of the Fed between 2014 and 2018, also attended the meeting held at the White House.
Biden: “Fighting inflation is the top economic priority”
In his opinion piece published in the Wall Street Journal on Monday, US President Biden said, “The most important thing we can do to ensure the transition from a rapid recovery to stable and stable growth is to reduce inflation. For this reason, I have made the fight against inflation the most important economic priority.”
On Friday, some data that was welcomed in the economy were announced. Inflation rose 6.3 percent in April compared to a year ago, according to the U.S. Department of Commerce. This data marks the first slowdown in inflation since November 2020, which is seen as a sign that prices are beginning to subside, at least for now.
While high inflation is causing financial difficulties for millions of families, it is stated that this may provide some relief if the rise in prices continues to slow down.
Fed Chairman Powell had promised the Federal Reserve would continue to raise the short-term interest rate until inflation ‘falls clearly and convincingly’.
These interest rate hikes increased the concerns that the FED, which aims to slow down borrowing and spending, would push the economy into recession. This concern led to sharp declines in stock prices in the stock market, even though the markets rose last week in the last two months.
Half point increase in June and July
Fed Chairman Powell had signaled that the Federal Reserve would raise interest rates by half a point both in June and July.
In his opinion piece for the Wall Street Journal, President Joe Biden signaled that record-breaking job creation will slow significantly after the pandemic, dropping from 500,000 jobs per month to a more reasonable 150,000.
Biden said that since such growth in employment is consistent with a low unemployment rate and a healthy economy, it will be an indication that the economy is successfully moving into the next phase of recovery.
Biden: “I will not try to influence Fed’s decision”
President Biden underlined that he would not interfere with the decision-making process of the FED, before meeting with FED Chairman Powell; however, he signaled that he and Powell were in line with the fight against inflation.
Biden said, “The president before me humiliated the Fed, and former presidents tried to improperly influence the decisions of the Central Bank during times of high inflation. I will not do that. I have appointed highly qualified persons from both parties to manage this institution. I also agree with their assessment that tackling inflation is the most important challenge in the economy right now.”