US President Joe Biden met with Fed Chair Jerome Powell on Tuesday to discuss how to tackle the decade-high levels of inflation in the US, a problem that’s also being seen around the world.
Some background here, central banks typically want to keep inflation around 2-3%, but right now, it’s about 5.4% in Singapore, 7.9% in Germany and 8.3% in the US.
So Biden says he’s trying to bring that rate down, but here’s the catch – he isn’t technically able to interfere with the Fed. So meetings like this with Powell are more about aligning common goals and interests than Biden instructing Powell on what to do. As polls show that inflation and rising prices weigh heavy on the minds of voters, it’s also to shift the burden back over to the Fed.
“My plan is to address inflation. That starts with a simple proposition: respect the Fed, respect the Fed’s independence, which I have done and will continue to do,” said US President Joe Biden in his public statement about the meeting.
“My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation. I won’t do this,” wrote President Joe Biden in an op-ed. “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.”
“It is going to be a challenging task, and it’s been made more challenging in the last couple of months because of global events,” Fed Chair Jerome Powell said in a Wall Street Journal live event earlier this month.