Biden, Fed Chairman discuss US inflation at White House

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WASHINGTON: President Joe Biden holds a rare White House meeting Tuesday, May 31, with Federal Reserve Chief Jerome Powell to discuss soaring inflation and the White House’s attempts to rein in soaring prices politically damaging ahead of the midterm elections.

In their first such meeting this year, Biden and Powell will “discuss the state of the U.S. and global economy,” the White House said, with a focus on inflation.

It is Biden’s “top economic priority,” the White House said, “as we move from a historic economic recovery to stable, steady growth that works for working families.”

Inflation over 8% casts a heavy shadow over Biden’s claims that he would restore the US economy to health after the COVID-induced crash.

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Employment has returned to near pre-pandemic levels and growth is strong, but sharp increases in the prices of basic necessities, including food and fuel, are fueling growing public discontent.

The Fed hiked rates by three-quarters of a percentage point, kicking off what central bank officials could be a series of hikes aimed at calming the economy, although there are concerns that the unforeseen result is a recession.

Federal Reserve Governor Christopher Waller said on Monday he backs several more half-point rate hikes — “until I see inflation move closer to our 2% target.”

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Biden is working to ease pressure on American consumers ahead of November’s midterm elections in which his Democrats are expected to lose control of Congress to Republicans.

Biden’s approval ratings are barely in the 40% range, reflecting his inability to sell voters on his upbeat message of U.S. economic recovery.

As the election approached, Biden turned to a more aggressive attempt to explain the phenomenon of inflation as a byproduct of forces beyond his control.

These include the Russian invasion of Ukraine, which triggered Western sanctions disrupting Russia’s huge energy industry. Meanwhile, President Vladimir Putin’s invading forces have virtually halted Ukraine’s large wheat exports.

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Biden calls the effect “Putin’s price hike.”

Writing in the Wall Street Journal on Monday, Biden emphasized the independence of the Federal Reserve, but noted that the central bank has “primary responsibility for controlling inflation.”

Biden recalled that his predecessor Donald Trump frequently launched political attacks on the Fed and that other presidents had also “sought to influence its decisions inappropriately during times of high inflation.”

“I won’t do that,” he promised.

In the op-ed, Biden said his long-term plan for economic health includes accelerating the pace of post-COVID recovery to more sustainable levels, increasing economic productivity and reducing the federal budget deficit. .

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