Joe Biden has been worried about high inflation for months, knowing that rising prices are undermining the strong recovery of the United States and worsening Americans’ views on the economy and its presidency.
This week, the president embarked on a new effort to smooth over his powers to fight inflation, although his ability to quickly reverse the disastrous economic and political momentum stemming from higher prices is limited.
On Tuesday, Biden called Jay Powell, chairman of the Federal Reserve, at the White House to offer his support to the central bank to do whatever it takes to reduce inflation as it continues with tighter monetary policy and rising interest rates. .
In a publication in The Wall Street Journal, Biden said he was aware that Americans were “concerned” about inflation, stressing that the country was struggling with high prices from a position of “force” compared to the rest of the world and outlining its own efforts to reduce the cost of living increases for middle-class households.
Senior officials in his administration – including Janet Yellen, finance minister and Kamala Harris, vice president – are also stepping up public appearances to talk about the state of the economy.
“I’m sure that [Biden] is concerned about its 40 percent approval rating when the economy recovered so much, “said Don Beyer, a Democratic member of the Virginia House of Representatives who chairs the joint economic committee in Congress.
“One thing to do with consumers is that they are worried about gas prices and food prices. The president cannot ignore this: he must say very clearly that he understands it and does what he can.
As early as November, Biden said inflation was more persistent than expected and causing difficulties for American families, as hopes that high prices would be temporary were dashed.
But the picture of inflation has worsened since the war in Ukraine and supply chain disruptions caused by new coronavirus blockades in China. This made the problem even more acute at the beginning of the year.
John Lear, chief economist at Morning Consult, said fears of inflation had “risen dramatically” among Americans – even younger adults, who “slowly began to acknowledge” fears of inflation, had already emerged. “They were the last to express their concerns, and that has changed since then.
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“[Consumer] “Confidence continues to fall even as the Federal Reserve and the White House come out and make these political statements – and inflation expectations continue to rise despite these policy changes,” he added. “So I think there’s a real gap in trust right now.”
Meanwhile, there are fears that the fiscal and monetary tightening needed to reduce inflation will lead to a sharp slowdown in the economy, reversing some of the progress made in the labor market over the past year and potentially driving the United States into recession. Jamie Dimon, chief executive of JPMorgan Chase, on Wednesday warned of an economic “hurricane” looming over the country.
While White House officials believe the United States can avoid such a scenario, they also stress that the economy is going through a delicate transition between a period of high inflation and a booming job market to more stable growth.
“We passed this first stage of the competition with a very fast video. That puts us in this strong position vis-à-vis our colleagues, “said Brian Deese, director of the National Economic Council, this week. “But this is a marathon and we need to move and move towards stable, sustainable growth.”
Biden has taken a series of unilateral steps to reduce inflation, including efforts to reduce the crisis in the supply chain in the port and transport industries, increase competition in the meat packaging business and persuade OPEC countries to increase oil production.
He also says his legislative plans – including measures to lower prescription drug prices, raise taxes on wealthy and corporate Americans and subsidize childcare costs – together will help reduce deficits and reduce of expenditures for medium-sized households.
But Biden has not yet decided whether to remove tariffs on billions of dollars of Chinese goods that could potentially be deflationary, and some economists and political experts say his fiscal policy is still too expansionist.
“The next step is to stop making demand-driven policies,” said Mark Goldwein, head of policy at the Center for Responsible Federal Budget, a non-partisan think tank in Washington. “In a way, we’re still keeping our feet on the gas.”
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Prolonged inflation has put the Biden administration and many Democrats on the defensive about the impact of its $ 1.9 billion stimulus plan adopted last March. While the White House believes it has saved the United States from a weak recovery, critics say it has overheated the economy.
Steve Ratner, a former Obama administration official and CEO of Wall Street, told MSNBC on Wednesday that the United States “puts too much money in people’s pockets” and “we all pay the price.” In response, Jean Sperling, a White House adviser, wrote on Twitter that “some have a curious obsession with exaggerating the impact” of the stimulus when high inflation is global.
In fact, in addition to demonstrating its responsiveness to inflation, many Democrats also want Biden not to be overly dissatisfied with economic factors that he cannot fully control.
“I think we will also continue to try to remind people that it is perfectly fair and OK to be upset by inflation, but please let’s not forget that this is not the only thing that is happening in our lives and in our lives. our country today, “said Beyer, a congressman for the Virginia Democrats. Let’s make our way through it, but let’s not be discouraged.
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