The squeeze hitting consumers comes at a tough time for the White House and Democrats, as the November midterm elections approach and voters cite inflation and the cost of living as top economic concerns. While price pressures have shown early signs of abating, it is unclear how large and sustainable that decline will be, given kinks in global supply chains and Russia’s war in Ukraine.Īmericans have become pessimistic about the economy and their own financial prospects as their paychecks have failed to keep up with inflation. Inflation in the United States is running near its fastest pace in four decades, with prices rising for gas, food and rent. Biden has also made clear that he expects the Fed to tame inflation without plunging the economy into a recession, a combination that could be difficult for Mr. The president has repeatedly said that he respects the Fed’s independence to set monetary policy and that he will not cajole the central bank to change interest rates, as his predecessor, former President Donald J. Powell in a potentially awkward position. Biden’s push to slow inflation, with the Fed leading the charge, puts Mr. The Fed has begun raising interest rates to slow down the economy, hoping that reining in consumer demand will eventually help bring price increases under control.īut while the central bank may help cool down the economy to a more sustainable path over time, the Fed’s moves are likely to hurt in the near term: Rate increases are making it more expensive for households and businesses to borrow money to fund big purchases, and they work to counteract inflation partly by slowing down hiring and wage growth. Powell “and other members of the Fed have noted at this moment they have been laser focused on addressing inflation like I am.” Biden said, “starts with a simple proposition: Respect the Fed, respect the Fed’s independence, which I have done and will continue to do.” Biden reiterated that fighting inflation was his top economic priority and that he would not interfere with the Fed as it tried to tame rising prices. Speaking to reporters at the start of the meeting, which also included Treasury Secretary Janet L. It was also the start of a monthlong attempt to convince the public that inflation is coming under control and that the economy is performing far better than Mr. Powell for a second term as Fed chair late last year, to congratulate him on his recent Senate confirmation. White House officials cast the visit as a chance for Mr. Powell, the Federal Reserve chair, at the White House on Tuesday, as part of an effort to both sell Americans on a brightening view of the economy and reassure consumers that leaders in Washington are hard at work to slow rapidly rising prices.
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