Biden meets with Powell and promises to respect the independence of the Fed

Biden meets with Powell and promises to respect the independence of the Fed

Biden assured, in a short statement to the press, that his “plan” to control prices “begins with a simple premise: respect the Fed, respect the independence of the Fed.”

The director of the White House National Economic Council also winked at the “transition” ahead for the US economy as the Fed raises interest rates to more normal levels to dampen demand and ease price pressures, slowing growth in the process.

“We have run this first leg of the race at a very fast pace which has put us in a strong position relative to our peers, but this is a marathon and we have to move and shift to stable and resilient growth,” said Deese.

“We can deal with inflation without having to sacrifice… all those (labor market) gains,” he added.

The first meeting between the two officials since Powell’s confirmation for a second term by the Senate earlier this month comes at a time when rising prices for gasoline, food and consumer goods consumption have sent inflation to 40-year highs.

Inflation moderated in April, after reaching a 40-year high in March. However, it remains high, at 6.3% for the 12-month measurement according to the PCE index followed by the Federal Reserve.

Biden’s deal with Powell contrasts sharply with former President Donald Trump’s approach, which involved routinely punishing Powell for Fed interest rate decisions and even threatening to fire him.

With information from Reuters and AFP

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