President Joe Biden met with Federal Reserve Chair Jerome Powell at the White House on Tuesday to discuss tackling historically high levels of inflation, declaring it a top priority for the administration while also reassuring the public that the economy remains strong.
At the meeting, President Biden and Fed Chair Jerome Powell signaled the growing urgency needed in fighting inflation, which remains at 40-year highs and has led to rising recession fears among investors who have been battered by a brutal market selloff this year.
The President reiterated on Tuesday that while bringing down inflation is a paramount concern, he will provide the central bank with the “independence it needs to tackle inflation,” Brian Deese, director of the National Economic Council, said at a press conference following Biden and Powell’s meeting.
The Biden Administration remains committed to fighting inflation, which is a “global challenge”—as evidenced by the dismal euro zone inflation report earlier today—but is “not going to interfere” with the Fed’s work, Deese noted at the press conference.
Prior to his discussion with Fed Chair Powell, Biden declared fighting inflation a “top economic priority” for his administration, according to his recent op-ed published in the Wall Street Journal.
Despite gloomy outlooks on Wall Street about a possible recession, the U.S. economy is taking on inflation from a position of “relative economic strength” and is in a period of transitioning from a historically strong recovery to more stable, resilient growth.
While the White House wouldn’t comment on specifics of Fed policy, Biden “agrees with the assessment” that the Fed is making on inflation and “has confidence in the people that he has nominated,” Deese said.
The administration is “confident that we can approach this challenge and focus our efforts on bringing inflation down without having to sacrifice economic growth because of the unique position of strength we are in,” Deese said after Biden and Powell’s meeting. Giving the central bank the ability to operate is “critically important, particularly at a moment when inflation is elevated but cannot be taken for granted, which is why the President is reinforcing it publicly today.”
The Federal Reserve raised interest rates by a half-percentage point earlier in May, its most aggressive increase yet in the battle against surging consumer prices. With recently released minutes from the Fed’s latest policy meeting indicating that most officials favor similar 0.50% interest rate hikes at upcoming meetings in June and July, the central bank is on pace for its most aggressive rate-hiking cycle in decades.