Biden to meet with Federal Reserve chair to discuss economy amid high inflation

by Alexander Bolton - 05/30/22 12:41 PM ET

FILE – Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee hearing, March 3, 2022 on Capitol Hill in Washington. The Federal Reserve is poised this week to begin unleashing its most drastic steps in three decades to attack inflation by making it costlier to borrow — for a car, a home, a business deal, a credit card purchase — all of which will compound Americans’ financial strains and likely weaken the economy. The Fed is expected to announce Wednesday, May 3, 2022 that it will begin quickly shrinking its vast stockpile of Treasury and mortgage bonds beginning in June — a move that will have the effect of further tightening credit. (Tom Williams, Pool via AP, File)

President Biden will meet Federal Reserve Chairman Jerome Powell on Tuesday to discuss the national economy amid high inflation, which has hurt Biden’s job approval rating.

It’s the first meeting between Biden and Powell since November, Bloomberg noted.

A schedule released by the White House said they will “discuss the state of the American and global economy.”

The meeting comes while the country continues to struggle with rising prices in many sectors of the economy.

The price of oil has risen to its highest level in two months since Biden announced in late March that he would tap into the Strategic Petroleum Reserve to release 1 million barrels a day for six months.

The personal consumption expenditures (PCE) price index, a Fed-monitored inflation gauge, rose by 6.3 percent over the previous year ending in April, down slightly from the 6.6 percent annual inflation rate reported in March.

The Fed has promised to raise interest rates aggressively to keep inflation in check, a prospect that that roiled the stock markets in recent weeks.

Fed board members discussed the possibility of raising the federal funds rate by 50 basis points several more times and moving beyond a “neutral” monetary stance to a restrictive one.

The aggressive stance taken by the central bank in recent months has put downward pressure on stocks, sending the S&P 500 down more than 20 percent from its record high.

Republicans have repeatedly bashed Biden for rising prices, blaming his fiscal policy and the passage of the $1.9 trillion American Rescue Plan for contributing to inflation.

Democratic lawmakers have responded by arguing inflation is driven by supply-chain breakdowns related to the COVID-19 pandemic and a drop in oil and wheat supplies caused by Russia’s invasion of Ukraine.

Germany on Monday reported that its economy experienced 8.7 percent inflation in May compared to a year ago, its highest rate of inflation in decades.

Powell told lawmakers in March that the Fed should have acted sooner to contain inflation.

“Hindsight says we should have moved earlier,” he conceded and pledged to use the Fed’s tools to bring inflation closer in line with its 2 percent target.

Tags Federal Reserve Inflation Jerome Powell Joe Biden U.S. economy