As Biden garners huge approval ratings, the White House moves to act on inflation

After a year of relentless price hikes, the White House It is finally turning into full-fledged inflation-fighting mode, with officials swarming through news channels in an effort to stem the political bloodbath as President Biden’s popularity plummets.

The administration has taken steps to calm voter turmoil over rising inflation by signaling that Biden understands what American households are going through — and that officials are doing their best to control prices — ahead of the November midterm elections, in which Democrats already risk losing their code — a slim majority.

High inflation may be ‘painfully slow’ to fall

Just this week, Biden held a rare Oval Office meeting with the Fed chair Jerome Powellwrote an article in the Wall Street Journal about his plan to tackle price hikes and sent his top aides, including Treasury Secretary Janet Yellen, through news channels to promote his plan.

US President Joe Biden (center) meets Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, in the Oval Office of the White House on May 31, 2022 in Washington, DC. (Kevin Deitch/Getty Images/Getty Images)

Biden called tackling inflation a “top priority” during his meeting with Powell, although he also sought to blame price hikes, saying that fighting inflation fell largely within the Fed’s purview. The White House has increasingly tried to shift responsibility for handling rates to the Federal Reserve — polls show that inflation, which has been hovering near a 40-year high for months, is a major concern for voters.

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“My plan is to tackle inflation. It starts with a simple proposition: Respect the Federal Reserve, respect the independence of the Federal Reserve, which I did and will continue to do,” Biden said.

US economy in recession, the world’s largest hedge fund warns

The meeting is just part of a multi-month lightning campaign planned by the White House, designed to underscore the historic level of job creation and the low unemployment rate during Biden’s first 17 months in office, as well as plans to pump more money into Americans. pockets.

The US economy recorded its strongest growth in nearly four decades in 2021, buoyed by trillions of dollars in government stimulus and easy monetary policies that kept borrowing costs near zero. While the pandemic relief efforts have helped keep families afloat during the pandemic and have helped raise the unemployment rate from 14.7% to 3.6% in just two years, they have also boosted rapid consumer demand that has exacerbated already high inflation.

The Labor Department reported last month that the Consumer Price Index jumped 8.3% in April, confirming that inflationary pressures in the economy remain very strong. Moreover, gas prices hit another record high on Thursday, with a gallon of gas now averaging $4.71 — up 40% from just a year ago.

Most economists now expect high prices to continue throughout the year, exacerbating political headaches for both Biden and the Federal Reserve.

A Gallup poll on Tuesday showed that only 14% of Americans rate economic conditions as “excellent” or “good,” while nearly half — 46% — describe them as “poor.” Another 39% said the economic landscape is “only fair”. That’s less than a month ago, when 20% of Americans rated conditions as good and only 42% said they were good.

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The president has faced heavy criticism, along with the Federal Reserve, for referring to inflation as temporary for several months, even as it has become clear that high inflation is likely to last longer than expected. Biden has repeatedly blamed price hikes on supply chain bottlenecks and more pandemic– Disruptions caused by the economy, as well as the Russian war in Ukraine. Republicans have thrown it on the president’s massive spending agenda.

When price increases continued, even as Democrats expected them to slow, the White House moved and began arguing that Democrats’ massive spending bill to rebuild better would help address cost pressures. But Senator Joe Manchin, DW.Va, squashed that legislation, letting Democrats spin to find another defense against inflation.

Administration officials have since admitted that they did not expect last year to happen as well.

“I think I was wrong at the time about the path inflation was going to take,” Treasury Secretary Janet Yellen said Tuesday during an interview with CNN. “There were unexpected and significant shocks that boosted energy and food prices, and supply bottlenecks that badly impacted our economy that I didn’t fully understand…at the time.”

Biden inflated

US President Joe Biden speaks during a visit to a family farm in Kankakee, Illinois, US, on Wednesday, May 11, 2022. (Taylor Glascock/Bloomberg via Getty Images/Getty Images)

It remains to be seen whether Biden’s new strategy on the economy will prove effective with voters. It comes at an increasingly unstable time for the US economy, as the Federal Reserve moves at the fastest pace in decades to raise interest rates and crush inflation. Policy makers voted last month to raise the short-term interest rate by 50 basis points and all promised that increases of a similar size would be on the table at upcoming meetings.

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There is a growing concern on Wall Street feed it The economy may be dragged into recession with its inflationary battle: Bank of America, as well as Fannie Mae and Deutsche Bank, are among Wall Street firms anticipating a recession in the next two years, along with former Federal Reserve Chairman Ben Bernanke.

Powell He acknowledged that there could be some “pain associated with” lowering inflation and curbing demand, but he opposed the idea of ​​an impending recession, identifying the labor market and strong consumer spending as bright spots in the economy. However, he cautioned, a soft landing is not guaranteed.

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“It’s going to be a tough job, and it’s gotten even more difficult in the last couple of months because of global events,” Powell said recently during a live event in the Wall Street Journal, referring to the Ukraine war and the COVID lockdown in China.

But he added, “There are a number of reasonable paths to getting a soft or smooth landing. Our job is not to block the odds. It’s to try and make it happen.”

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