WASHINGTON (AP) – US President Joe Biden is set to meet with Federal Reserve Chairman Jerome Powell as US inflation rises.
Tuesday’s meeting is the first meeting in weeks since Biden appointed Powell to head the central bank, his second term in the Senate.
The White House said the two would discuss the state of the US and the world economy, and especially inflation.
“The most important thing we can do now to move from rapid recovery to sustainable, sustainable growth is to reduce inflation,” Biden told The Wall Street Journal in an edition Monday. “That is why tackling inflation is my number one economic priority.”
Inflation in the United States hit a 40-year high earlier this year, amid a recovery in the global economy from the epidemic and supply chain sanctions caused by Russia’s invasion of Ukraine.
But the economy saw welcome data on Friday as inflation rose to 6.3% in April from a year earlier, indicating that the first recession and higher prices after November 2020 may finally be moderate.
Inflation was below the four-decade high of 6.6% set in March. While high inflation is still causing hardship for millions of families, any reduction in price rises, if prolonged, will provide some relief.
Powell has promised to raise the central bank’s key short-term interest rate to keep the economy cool until inflation eases “in a clear and concrete way.” Those rate hikes have sparked fears that the central bank, in slow borrowing and spending, could push the economy into recession. That concern has caused stock prices to fall sharply over the past two months, although markets rallied last week.
Powell has signaled that the central bank will raise its benchmark rate by half-points in both June and July – more than double the regular rate increase.
Biden, in his op-ed, signaled that the record pace of job creation after the epidemic would drop dramatically, suggesting moderate levels of 500,000 to 150,000 jobs per month. “As this kind of job growth coincides with a low unemployment rate and a healthy economy, it will be a sign that we are successfully moving to the next phase of recovery,” he said.
Prior to the meeting, Biden had promised not to interfere in the central bank’s decision-making process, but suggested that he and Powell work together to tackle inflation.
“My predecessor insulted the central bank, and past presidents have tried to influence its decisions inappropriately in times of rising inflation,” Biden wrote. “I will not do this. I have appointed highly qualified people from both parties to lead the company. I accept their assessment that combating inflation is now our main economic challenge.