WASHINGTON (AP) – President Joe Biden is set to meet with Federal Reserve Chairman Jerome Powell as rising inflation escapes the pockets of Americans.
Tuesday’s meeting will be the first since Biden renamed Powell to head the central bank and comes weeks after his confirmation for a second term in the Senate.
The White House said the couple would discuss the US state and the global economy and especially inflation.
“The most important thing we can do now to move from a rapid recovery to steady, steady growth is to reduce inflation,” Biden said in an article published Monday by The Wall Street Journal. “That’s why I have made the fight against inflation my top economic priority.”
Inflation in the US peaked at 40 years earlier this year, amid supply chain constraints caused by the global economic recovery from the pandemic and the invasion of Ukraine by Russia.
But the economy received a lot of data on Friday, as the Commerce Department said inflation rose 6.3% in April from a year earlier, the first slowdown since November 2020. and a sign that high prices could finally moderate, at least for now.
Inflation was below the four-decade high of 6.6% in March. While high inflation is still causing hardship for millions of households, any slowdown in price increases, if maintained, would provide modest relief.
Powell has pledged to keep raising the Fed’s key short-term interest rate to cool the economy until inflation “falls in a clear and convincing way.” These rate hikes have sparked fears that the Fed, in its drive to curb debt and spending, could push the economy into recession. This concern has led to sharp falls in stock prices over the past two months, although markets rebounded last week.
Powell has indicated that the Fed is likely to raise its benchmark rate by half a point in both June and July, twice the size of the usual rate hike.
Biden, in his comment, noted that the record pace of post-pandemic job creation would slow dramatically, suggesting more moderate levels of 150,000 jobs a month from 500,000. He said that “it will be a sign that we are successfully entering the next phase of recovery, as this type of job growth is consistent with a low unemployment rate and a healthy economy.”
Prior to the meeting, Biden pledged not to interfere with Fed decision-making, but suggested that he and Powell are aligned to address inflation.
“My predecessor downgraded the Fed and previous presidents have tried to influence their decisions inappropriately during periods of high inflation,” Biden wrote. “I will not do that. I have appointed highly qualified people from both sides to lead this institution. I agree with their assessment that the fight against inflation is our main economic challenge right now.”