WASHINGTON — President Joe Biden is set to meet with Federal Reserve Chairman Jerome Powell as soaring inflation takes a bite out of Americans’ pocketbooks.
The meeting Tuesday will be the first since Biden renominated Powell to lead the central bank and comes weeks after his confirmation for a second term by the Senate.
The White House said the pair would discuss the state of the U.S. and global economy and especially inflation.
“The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down,” Biden said in an op-ed posted Monday by The Wall Street Journal. “That is why I have made tackling inflation my top economic priority.”
Inflation in the U.S. hit a 40-year high earlier this year, amid supply chain constraints caused by the global economy’s recovery from the pandemic and Russia’s invasion of Ukraine.
But the economy saw a welcome bit of data Friday, as the Commerce Department said inflation rose 6.3% in April from a year earlier, the first slowdown since November 2020 and a sign that high prices may finally be moderating, at least for now.
The inflation figure was below the four-decade high of 6.6% set in March. While high inflation is still causing hardships for millions of households, any slowing of price increases, if sustained, would provide some modest relief.
Powell has pledged to keep ratcheting up the Fed’s key short-term interest rate to cool the economy until inflation is “coming down in a clear and convincing way.” Those rate hikes have spurred fears that the Fed, in its drive to slow borrowing and spending, may push the economy into a recession. That concern has caused sharp drops in stock prices in the past two months, though markets rallied last week.
Powell has signaled that the Fed will likely raise its benchmark rate by a half-point in both June and July — twice the size of the usual rate increase.
Biden, in his op-ed, signaled that the record-setting pace of job creation in the aftermath of the pandemic would slow dramatically, suggesting more moderate levels of 150,000 jobs per month from 500,000. He said “it will be a sign that we are successfully moving into the next phase of recovery—as this kind of job growth is consistent with a low unemployment rate and a healthy economy.”
Ahead of the meeting Biden pledged not to interfere in the Fed’s decision-making, but suggested that he and Powell are aligned on addressing inflation.
“My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation,” Biden wrote. “I won’t do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our top economic challenge right now.”