‘Respect the Fed’: Biden swears he won’t interfere with Federal Reserve measures to fight inflation

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WASHINGTON — President Joe Biden vowed on Tuesday that he would not interfere with the Federal Reserve’s efforts to rein in inflation after the central bank’s decision to raise interest rates this month spurred spiral the markets.

“My plan to fight inflation starts with a simple proposition: Respect the Fed. Respect the independence of the Fed,” Biden said in brief remarks kicking off a post-Fed meeting. noon with Federal Reserve Chairman Jerome Powell.

After: Biden calls inflation his top national priority, accusing Republicans of not having a plan

The meeting, which took place at the invitation of Biden, is his first with Powell since the president nominated him for a second term in November as head of the Federal Reserve and their third meeting overall. Powell’s nomination was confirmed by Congress earlier this month as central bank chairman and he was sworn in last week.

“My job as president is not just to appoint highly qualified people to this institution, but to give them the space they need to do their jobs,” Biden said. “I will not interfere with their critically important work.”

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Powell made no public remarks to members of the media at the start of the Oval Office meeting. Treasury Secretary Janet Yellen was also present.

Biden, who has called inflation “the nation’s top priority,” struggled to find answers amid a 40-year high in consumer prices for gasoline, food, housing, vehicles and fuels. other goods. It’s a key reason why Biden’s approval rating has remained around 40%, adding to the political headwinds Democrats are already facing in an attempt to maintain the power of Congress in the mid-election. mandate this year.

After: Inflation is at its highest for 40 years. The Fed announced these aggressive measures to combat it

Biden’s hands-off approach with the Federal Reserve is very different from the approach of former President Donald Trump, who repeatedly spoke out against the Federal Reserve, often publicly calling out Powell — whom he named in 2017 – to cut interest rates to stimulate the national economy. .

The Federal Reserve, which operates independently of the White House, raised its key short-term interest rate by half a percentage point in May in a bid to dampen consumer demand to keep inflation under control. Rates moved from a benchmark range of 0.25% to 0.5% to a range of 0.75% to 1%, the Fed’s biggest hike since 2000.

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President Joe Biden meets with Treasury Secretary Janet Yellen, right, and Federal Reserve Chairman Jerome Powell in the Oval Office of the White House, Tuesday, May 31, 2022, in Washington.

The central bank also said it would start cutting its $9 trillion in bonds next month, a strategy that will push up long-term interest rates.

Yet other hurdles such as Russia’s war in Ukraine and ongoing supply chain issues remain beyond the central bank’s control.

There are some signs that the inflation outlook is improving. Inflation remained high in April, with consumer prices 8.3% higher than a year ago, but down from 8.5% in March, possibly signaling that the inflation has peaked. Still, Tuesday’s average gasoline price was a record $4.62 a gallon, according to AAA, about $1.50 more than drivers were paying last Memorial Day weekend.

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After: Why Biden is blasting the ‘ultra MAGA’ agenda, not Donald Trump, in his midterm push

“The United States is in a better economic position than almost any other country,” Biden wrote in a Wall Street Journal op-ed on Tuesday. He noted that by the end of this year, the U.S. economy will be larger, relative to its pre-pandemic size, than any other Group of 7 economy, according to the International Monetary Fund.

National Economic Council Director Brian Deese called Biden’s meeting with Powell and Yellen “very constructive” during the White House press briefing. Deese said Biden is “confident” that inflation can be brought down without sacrificing economic growth.

“It’s been an uncertain and unexpected recovery period,” Deese said. “We are currently focusing on the right policy to bring prices down without sacrificing all the economic gains we have made.”

The president is expected to continue hammering against a proposal by Sen. Rick Scott, R-Fla., for all Americans to pay income tax, which the White House has worked aggressively to frame as l GOP alternative.

After: The surge in inflation slowed in April. Will price-weary shoppers get some relief?

Join Joey Garrison on Twitter @joeygarrison.

This article originally appeared on USA TODAY: Biden swears he won’t interfere with Federal Reserve on inflation

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