Biden, Fed chair discuss US inflation at White House

President Joe Biden will hold a rare White House meeting with Federal Reserve Chairman Jerome Powell on Tuesday to discuss soaring inflation and White House efforts to tame the politically damaging price surge ahead of the midterm elections.

Biden and Powell will “discuss the state of the American and global economies,” according to the White House, in their first meeting this year.

This is Biden’s “top economic priority,” the White House said, “As we transition from a historic economic recovery to stable, steady growth that works for working families.”

Inflation of more than eight percent is casting a heavy shadow on Biden’s claims to be steering the US economy back to health after the Covid-19-induced crash.

Employment is back near pre-pandemic levels and growth is strong, but savage price increases for essentials including food and fuel are driving growing public dissatisfaction.

The Fed has raised rates three-quarters of a percentage point, kicking off what central bank officials say could be a series of hikes aimed at calming down the economy, although there are fears that the unintended result may be a recession.

Federal Reserve Governor Christopher Waller said Monday that he backs several more half-point rate hikes — “until I see inflation coming down closer to our two percent target.”

Biden is scrambling to ease the pressure on American consumers ahead of the November midterm elections in which his Democrats are forecast to lose control of Congress to the Republicans.

Biden’s own approval ratings are barely in the 40 percent range, reflecting his inability to sell voters on his upbeat message of US economic recovery.

As the election approaches, Biden has pivoted to more aggressively trying to explain the inflation phenomenon as a byproduct of forces beyond his control.

These include the Russian invasion of Ukraine, which triggered Western sanctions disrupting the huge Russian energy industry. President Vladimir Putin’s invading forces, meanwhile, have all but put a halt to Ukraine’s important wheat exports.

Biden calls the effect “Putin’s price hike.”

Writing in the Wall Street Journal on Monday, Biden underlined the independence of the Federal Reserve, but noted that the central bank has “a primary responsibility to control inflation.”

Biden recalled that his predecessor Donald Trump frequently launched political attacks on the Fed and that other presidents had also “sought to influence its decisions inappropriately during periods of elevated inflation.”

“I’m not going to do it,” he vowed.

In the op-ed, Biden outlined his long-term economic strategy, which includes slowing the post-Covid recovery to more sustainable levels, increasing economic productivity, and reducing the federal budget deficit.

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