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• Biden affirms Fed’s independence while addressing inflation
President Joe Biden met with Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen on Tuesday afternoon at a time when his administration is working towards fighting high inflation.
Tuesday’s meeting is the first since Powell was renominated in November by Biden to lead the central bank and comes two weeks after his confirmation for a second term by the Senate, reported Wall Street Journal.
Biden said he was meeting with Powell to "discuss my top priority, and that is addressing inflation."
Biden congratulated Powell on his recent Senate confirmation and promised to maintain a hands-off approach to the Fed. “I’m not going to interfere with their critically important work. They have a laser focus on addressing inflation, just like I am,” he said in remarks to reporters at the start of the meeting.
Biden's plan, Powell's action
Biden said his plan to deal with inflation "starts with a simple proposition: respect the Fed, respect the Fed's independence, which I have done and will continue to do."
In April 2021, the president made his intentions of maintaining a distance from an ‘independent Fed’ and its decision-making process.
The Fed has already raised interest rates by 75 basis points this year. The interest rates are expected to ratchet up by half a percentage point at both their June and July meetings.
This move could prove to be painful to households and firms and may push the unemployment rate a bit higher but Powell believes that high inflation is the primary economic risk faced by the US.
Source: Wall Street Journal
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