Biden plots inflation fight with Fed chair as nation worries

WASHINGTON (AP) — Focused on relentlessly rising prices, President Joe Biden plotted inflation-fighting strategy Tuesday with the chairman of the Federal Reserve, with the fate of the economy and his own political prospects increasingly dependent on the actions of the government’s central bank.

Biden hoped to demonstrate to voters that he was attuned to their worries about higher gasoline, grocery and other prices whiles still insisting an independent Fed will act free from political pressure.

Like Biden, the Fed wants to slow inflation without knocking the U.S. economy into recession, a highly sensitive mission that is to include increasing benchmark interest rates this summer. The president said he would not attempt to direct that course as some previous presidents have tried.

“My plan to address inflation starts with simple proposition: Respect the Fed, respect the Fed’s independence,” Biden said.

The sit-down on a heat-drenched late-spring day was Biden’s latest effort to show his dedication to containing the 8.3% leap in consumer prices over the past year. Rising gas and food costs have angered many Americans heading into the midterm elections, putting Democrats’ control of the House and Senate at risk.

Biden is running out of options on his own. His past attempts — oil releases from the strategic reserve, improving port operations and calls to investigate price gouging — have fallen short of satisfactory results. High prices have undermined his efforts to highlight the low 3.6% unemployment rate, leaving a growing sense of pessimism among Americans.

Tuesday’s meeting was the first since Powell was renominated in November by Biden to lead the central bank and came two weeks after his confirmation for a second term by the Senate.

It also represented something of a reversal by Biden as inflation weighs heavily on voters’ minds. The president asserted in April 2021 that he was “very fastidious about not talking” with the independent Fed and wanted to avoid being seen as “telling them what they should and shouldn’t do.”

The White House, along with the Fed, initially portrayed the inflation surge as a temporary side effect caused by supply chain issues as the U.S. emerged from the pandemic. Republican lawmakers were fast to criticize Biden’s $1.9 trillion coronavirus relief package from last year as pumping too much money into the economy and causing more inflation. That narrative also has held some sway with leading economists who say the financial support was excessive even though it helped the job market roar back.

The administration has walked back its previous statements. Treasury Secretary Janet Yellen told CNN on Tuesday evening that she did not fully understand the impact that unanticipated large shocks and supply bottlenecks would have on the economy. “Look, I think I was wrong then about the path that inflation would take,” she said. “But we recognize that now the Federal Reserve is taking the steps…