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President Joe Biden met Federal Reserve Chairman Jerome Powell for the first time since last November at the White House on Tuesday.
Saul Loeb/AFP via Getty Images
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President Joe Biden met Tuesday afternoon with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, reaffirming a “laser focus” on controlling inflation that has been hitting multi-decade highs.
In their first meeting since Biden nominated Powell for a second four-year term as head of the central bank last fall, Biden again stressed that he would not seek to inappropriately influence decisions of the central bank. Fed. “I’m not going to interfere with their critically important work,” Biden said. told reporters before the start of the meeting. “They are focused on fighting inflation, just like me.”
The Fed looks set to raise interest rates by half a percentage point in June and again in July, on top of their half a percentage point hike in early May, but Powell isn’t. didn’t say what might happen after that.
For Biden, the sense of urgency increases as his poll numbers drop. According FiveThirtyEight website, 40.8% of Americans approve of the president against 54% who disapprove to date. This compares to 43.4% approval versus 51.6% disapproval earlier this year.
The global economy is under threat, high inflation is exacerbated by Russian President Vladimir Putin’s invasion of Ukraine, supply chains continue to cause shortages and rising prices, and energy markets are volatile.
“Americans are anxious. I know that feeling,” Biden wrote in a Sunday opinion piece for the Wall Street Journal.
“But the American people should have confidence that our economy faces these challenges from a position of strength,” he wrote. “The most important thing we can do now to move from a rapid recovery to stable and steady growth is to bring inflation down.”
Biden said that since taking office in January 2021, business investment increased by 20%, manufacturing jobs are accelerating, a record number of new small businesses are being launched, the labor market added 8.3 million new jobsand unemployment fell at the fastest rate on record, to 3.6% in April.
One of Powell’s challenges is to raise rates enough to reduce job vacancies without triggering a recession.
“The United States is in a better economic position than almost any other country,” Biden wrote. The US economy will be bigger by the end of 2022, relative to its pre-pandemic size, than any other Group of 7 economy, according to the International Monetary Fund. And it could be poised to grow faster than China’s economy for the first time since 1976.
The Wall Street Journal quoted White House officials as saying Biden plans to emphasize his economic agenda in June through travel, events and policy announcements.
Yet the prices of basic commodities such as food and fuel continue to pinch wallets. The average price of gasoline in the country has climbed for the sixth consecutive week, to $4.615 Tuesday early afternoon. That’s up 0.9 cents from last week’s average and 43.6 cents more than last month, according to GasBuddy. The average diesel price edged down 4 cents last week to $5.50 a gallon.
Dwindling refining capacity, the European Union’s decision to sanction Russian oil and related declines in gasoline inventories could further increase prices at the pump, wrote Patrick De Haan, head of oil analysis at GasBuddy. “The odds are increasing that we will eventually see the national average reach that dreaded $5 a gallon.”
Consumer confidence dipped slightly in May to 106.4, from 108.6 in April, reflecting easing labor market conditions and improving business conditions, the Conference Board reported Tuesday.
Write to Janet H. Cho at janet.cho@dowjones.com
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