Biden and Powell meet to discuss US and global economy

President Biden met with Federal Reserve Chairman Jerome H. Powell at the White House on Tuesday in an effort to both sell Americans a m...

President Biden met with Federal Reserve Chairman Jerome H. Powell at the White House on Tuesday in an effort to both sell Americans a more favorable view of the economy and reassure investors. consumers that Washington leaders are working hard to slow rapidly rising prices.

White House officials presented the visit as a chance for Mr. Biden, who nominated Mr. Powell for a second term as Fed chair late last year, to congratulate him on his recent confirmation in the Senate. It was also the start of a month-long attempt to convince the public that inflation is under control and the economy is doing much better than Mr Biden’s poll numbers suggest.

Speaking to reporters at the start of the meeting, which also included Treasury Secretary Janet L. Yellen, former Fed chairwoman, Biden reiterated that tackling inflation was his top economic priority and that he would not interfere with the Fed as it tries to tame rising prices.

This fight, Mr. Biden said, “starts with a simple proposition: respect the Fed, respect the independence of the Fed, which I have done and will continue to do.”

The chairman added that Mr. Powell “and other members of the Fed have noted right now that they are laser-focused on fighting inflation like me.”

The Fed has started raising interest rates to slow the economy, hoping that containing consumer demand will eventually help keep rising prices in check.

But while the central bank can help cool the economy on a more sustainable path over time, the Fed’s actions may hurt in the short term: rate hikes make it more costly for households and businesses to borrow money to finance big purchases, and they try to thwart inflation by partly slowing growth in hiring and wages.

Mr. Biden’s efforts to slow inflation, with the Fed in the lead, puts Mr. Powell in a potentially tricky position. The president has repeatedly said he respects the Fed’s independence in setting monetary policy and that he would not persuade the central bank to change interest rates, like his predecessor, former chairman Donald J. Trump, liked to do it. But Mr. Biden also made clear that he expects the Fed to bring inflation under control without plunging the economy into a recession, a combination that could be difficult for Mr. Powell to pull off.

Inflation in the United States is on near its fastest pace in four decades, with rising gas prices, food and rent. Although price pressures have shown early signs of easing, it is unclear how large and long-lasting this decline will be, given the rifts in global supply chains and Russia’s war in Ukraine. .

Americans have become pessimistic on the economy and their own financial prospects because their salaries have not kept up with inflation. The pressure hitting consumers comes at a difficult time for the White House and Democrats, ahead of the November midterm elections and voters cite inflation and cost of living as top economic concerns.

Mr Biden has always taken a much more optimistic tone than the general public on the economy, pointing month after month to rapid job growth – and a subsequent drop in the unemployment rate – as the country recovers. of the pandemic recession.

After more than a year of watching inflation rise faster than his economic advisers had expected, the president has in recent weeks tried to convey more urgency with his comments on inflation, promising to do whatever what is in its power to slow the rise in costs.

On Tuesday, the administration’s top economic officials fanned out across cable news programs and the White House briefing room to hammer home the message that job growth has rebounded strongly and the economy is transitioning to a more stable rate of growth – and lower inflation.

Mr Biden “understands that right now the main issue people are concerned about is prices – prices at the gas station, prices at the grocery store,” Brian Deese, who leads the Council, told reporters on Tuesday. White House national economy. “And he made it very clear, and he communicates very clearly, that this is his main economic priority and that we can deal with it from a position of strength.”

Mr. Biden underscored these points in a Wall Street Journal opinion piece published online Monday evening, in which he highlighted the wealth gains for typical Americans under his watch and said the United States was “in a better economic position than almost any other country”. He promised to fight inflation by cutting the federal budget deficit, working to fix broken global supply chains, passing legislation to cut energy costs for families, and building on the Fed.

“With the right policies,” he wrote, “the United States can transition from recovery to stable, steady growth and lower inflation without giving up all of these historic gains.”

Ms Yellen admitted after Tuesday’s meeting that she was wrong to downplay inflation, noting that the economy was facing unexpected shocks and supply chain issues that have driven up food prices and energy.

“Well, look, I think I was wrong about what path inflation would take,” Ms Yellen told CNN.

While Mr. Biden announced some measures to cut costs — and Mr. Deese and other aides called on Congress to do more to help the effort — the president made clear he was count on the fed to help control inflation.

Rapid price increases are also a problem globally, as beleaguered shipping routes and factory closures in China cut supplies of some goods and the war in Ukraine pushes up fuel and food prices. . The The European Central Bank should start rise in interest rates this summer, and the bank of england, Reserve Bank of Australia and Bank of Canada are among a group of other monetary policy authorities that have already started to raise their borrowing costs.

As central banks around the world withdraw economic support, the war in Ukraine fuels uncertainty and China locks down cities in an attempt to maintain the coronavirus from spreadingthe risks for the global economy are significant.

At the Fed meeting this month, “various” policymakers “noted downside risks to the outlook, including risks associated with the Russian invasion and Covid-related lockdowns in China and the likelihood of a prolonged rise in energy and commodity prices”. meeting reportwhich were published last week, showed this.

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Newsrust - US Top News: Biden and Powell meet to discuss US and global economy
Biden and Powell meet to discuss US and global economy
Newsrust - US Top News
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