Joe Biden has been worried about high inflation for months, knowing that rising prices are undermining the strong US recovery and aggravating Americans’ views on the economy and his presidency.
This week, the president has embarked on a new effort to polish his anti-inflation credentials, although his ability to quickly reverse the pernicious economic and political dynamics resulting from rising prices is limited.
On Tuesday, Biden called on Federal Reserve Chairman Jay Powell in the White House to offer his support for the central bank to do whatever it takes to curb inflation as it moves forward with tighter monetary policy and rising inflation. interest rate.
In an opinion piece in the Wall Street Journal, Biden said he realized that Americans were “anxious” about inflation, stressing that the country was struggling with high prices from a “strong” position in compared to the rest of the world and presented its own position. efforts to reduce the rising cost of living for middle-class households.
Senior officials in her administration, such as Treasury Secretary Janet Yellen and Vice President Kamala Harris, are also stepping up their public appearances to talk about the state of the economy.
“I’m sure of it [Biden] it is disturbed by its 40% approval rating when the economy has recovered so strongly, “said Don Beyer, a Democratic member of the Virginia House of Representatives who chairs the joint economic committee of Congress.
“The first thing, if you talk to consumers, is that they’re worried about gas and food prices. The president can’t ignore it. He has to say very clearly that he understands that and that he’s doing everything he can.”
As early as November, Biden said inflation was more stubborn than expected and was causing hardship for American households, as hopes that high prices were transient were dashed.
But the picture of inflation worsened further as a result of the war in Ukraine and supply chain disruptions caused by new coronavirus blockages in China. This made the problem even more acute at the beginning of the year.
John Leer, chief economist at Morning Consult, said inflation concerns have “risen sharply” among Americans, even younger adults who “took a long time to begin to recognize” now fears inflation. “They were the last to express their concerns, and that has changed since then.”
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“[Consumer] Confidence has continued to fall, even as the Federal Reserve and the White House come out and make these policy announcements, and inflation expectations continue to rise despite these policy changes, “he added.” So I think right now. there is a real credibility gap “.
Meanwhile, concerns are being raised that the fiscal and monetary tightening needed to reduce inflation will result in a sharp slowdown in the economy, which would reverse some of the progress the labor market has made over the past year and could bring down the states. Coupled with a recession. Jamie Dimon, CEO of JPMorgan Chase, warned on Wednesday of an economic “hurricane” that will affect the country.
While White House officials believe the U.S. can avoid this scenario, they also stress that the economy is going through a delicate transition period between a period of high inflation and a booming labor market to further growth. stable.
“We did this first part of the race at a very fast pace. This has put us in that strong position, in relation to our peers, “said Brian Deese, director of the National Economic Council,” But this is a marathon and we need to move and move to stable, resilient growth. ” .
Biden has taken a number of unilateral steps to reduce inflation, including efforts to reduce supply chain problems in ports and the trucking industry, strengthen competition in the meat packaging business and persuade OPEC countries to increase oil production.
He also argued that his legislative plans, including measures to reduce the prices of prescription drugs, raise taxes on the wealthy and business in the United States, and subsidize child care costs, would jointly help reduce the deficit and reduce costs for in average households.
But Biden has yet to decide whether to eliminate tariffs on billions of dollars worth of Chinese products, which could potentially be deflationary, and some economists and policy experts say their fiscal policies are still too expansive.
“The next step is to stop making policies that are increasing demand,” said Marc Goldwein, chief policy officer at the Center for a Responsible Federal Budget, a non-partisan think tank in Washington. “In a way, we still have our feet in the gas.”
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Persistent inflation has put the Biden administration and many Democrats on the defensive about the impact of its $ 1.9 trillion stimulus plan enacted in March last year. While the White House believes it saved the U.S. from a sluggish recovery, critics say it overheated the economy.
Steve Rattner, a former Obama administration official and Wall Street executive, told MSNBC on Wednesday that the U.S. “put too much money in people’s pockets” and “we’re all paying the price.” In response, White House adviser Gene Sperling wrote on Twitter that “some have a curious obsession with exaggerating the impact” of the stimulus, when high inflation was global.
In fact, in addition to showing its ability to respond to inflation, many Democrats also want Biden not to be overly depressed about economic factors that he cannot fully control.
“I think we will also continue to try to remind people that it is totally fair and okay to be upset with inflation, but please, let’s not forget that this is not the only thing that is happening in our lives and in our country today.” said Beyer. , the Democratic congressman from Virginia. “We will fight to overcome it, but we will not give up.”