With a focus on steadily rising prices, President Joe Biden formulated an inflation-fighting strategy Tuesday night with the Chairman of the Federal Reserve. The fate of the economy as well as his political prospects are increasingly dependent upon the actions taken by the central bank.
Biden wanted to show voters that he is sensitive to consumers' worries about rising gasoline and grocery prices, while insisting that an independent Fed will not be subject to political pressure.
The Fed, like Biden, wants to slow inflation but not plunge the U.S. into recession. This is a sensitive mission that will include raising benchmark interest rates this summer. He said that he wouldn't attempt to steer the course of events in the same way as previous presidents.
Biden stated, "My plan for addressing inflation begins with a simple proposition: Respect and respect the Fed, respect its independence."
Biden's latest attempt to demonstrate his commitment to containing the 8.3% increase in consumer prices over the last year was to sit down on a hot spring day. Many Americans are angry about rising food and gas prices, which could put Democrats' control over the House and Senate in jeopardy.
Biden has no other options. Biden's previous attempts to release oil from the strategic reserve, improve port operations and investigate price gouging have not yielded satisfactory results. His efforts to draw attention to the low unemployment rate of 3.6% have been undermined by high prices, leading Americans to feel more pessimistic.
Tuesday's meeting was the first since Powell had been renominated by Biden in November to head the central bank. It also came just two weeks after he was confirmed for a second term by Senate.
Biden also made a slight reversal, as inflation is weighing heavily on the minds of voters. In April 2021, the president stated that he was "very meticulous about not talking" to the independent Fed and wanted "not to be seen as telling them what they should or shouldn't do."
Initial reports by the Fed and the White House portrayed the inflation spike as a temporary side effect of supply chain problems as the U.S. recovered from the pandemic. Republican lawmakers quickly criticized Biden's $1.9 billion coronavirus relief package last year, saying it pumped too much money into America and caused more inflation. This narrative has also been popularized by leading economists, who claim that the financial support was too generous, despite the fact that it helped the job markets rebound.