In the face of ongoing, record-high consumer prices and an American voting public that sees it as the No. 1 issue ahead of the November midterm election cycle, President Joe Biden is leveraging every opportunity to tout his inflation-fighting bonafides.
What’s happening: Biden hosted a White House meeting with Federal Reserve Chairman Jerome Powell on Tuesday to discuss the administration’s plans to quell inflation rates that, while down a bit in April, have been trending at 40-year highs.
Unlike former President Donald Trump, Biden is pledging allegiance to the Fed’s strategy of aggressive action on interest rates in an effort to quell the skyrocketing costs of goods and services.
- “My plan to address inflation starts with the simple proposition: Respect the Fed, respect the Fed’s independence, which I have done and will continue to do,” Biden told reporters during the meeting with Powell, according to NBC News.
Tired of ‘trickle-down’: Biden penned a Monday Wall Street Journal op-ed in which he noted his support for the Fed’s actions on raising its benchmark interest rate, including a 0.5% increase earlier this month that was the largest in 20 years and follows a 0.25% bump in March.
The increases are the first following the monetary policy body’s work to keep interest near zero as a tactic to spur economic activity during the COVID-19 slowdown. The Fed has also signaled subsequent 0.5% increases are likely following both their June and July meetings.
- “I ran for president because I was tired of the so-called trickle-down economy,” Biden wrote. “We now have a chance to build on a historic recovery with an economy that works for working families. The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down.”
Biden’s plan: In the opinion piece, Biden outlined a three-point plan to address inflationary pressure that included his support of the Fed; implementing new efforts aiming to bring down the costs of energy and housing; and reducing the federal deficit.
Biden also signaled in his Wall Street Journal piece that the record-setting pace of job creation in the aftermath of the pandemic would slow dramatically, suggesting more moderate levels of 150,000 jobs per month from 500,000. He said “it will be a sign that we are successfully moving into the next phase of recovery — as this kind of job growth is consistent with a low unemployment rate and a healthy economy.”
Ahead of the meeting with Powell, Biden pledged not to interfere in the Fed’s decision-making, but suggested that he and Powell are aligned on addressing inflation.
- “My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation,” Biden wrote. “I won’t do this. 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.”
How inflation is impacting Americans: A Pew Research Center study released earlier this month found inflation easily outstripped all other concerns as the top problem facing the country today.
- Seven out of 10 Americans told Pew researchers they view inflation as a very big problem for the country, followed by the affordability of health care (55%) and violent crime (54%).
The Pew survey responses, which were gathered April 25-May 1 from 5,074 U.S. adults, also revealed a marked partisan gap when it comes to views on inflation.
- With few exceptions, Republicans and Democrats differ over what they see as major national problems, Pew found. Inflation is by far the top concern among Republicans and Republican-leaning independents, 84% of whom say it is a very big problem in the country today.
- A much narrower majority of Democrats and Democratic leaners (57%) view inflation as a very big problem. Among Democrats, larger shares see gun violence (70%), the affordability of health care (65%) and climate change (63%) as very big problems.
What Utahns think: A recent Deseret News/Hinckley Institute of Politics poll found Utahns are generally in support of the Fed’s actions on interest rates but an overwhelming majority are concerned that, in spite of the strategy, a U.S. economic recession may still be looming.
- The statewide poll of 808 registered voters conducted May 7-13 found 47% of respondents were in support of the Fed’s plan to raise interest rates to manage inflation while 38% opposed the strategy and 14% didn’t know. When it came to worries about a recession happening in the next year, 87% of poll participants said they had recession concerns, 11% said they weren’t concerned and 2% didn’t know.
In March, another Deseret News/Hinckley Institute of Politics statewide survey asked respondents to assign blame for the current bout of inflationary price increases.
- Not surprisingly, perhaps, partisanship played a role in the survey of 804 registered voters conducted March 9-21, and a plurality of respondents, 33%, pointed the finger at the Democratic Party when asked “who or what is to blame for inflation.”
- Republicans fared much better, earning only 6% in the blame game, while the Federal Reserve was seen as slightly more liable at 8%. The prices and policies of corporate America were the source of inflation for 17% of poll participants and 23% believe higher costs can be traced back to the economic fallout from COVID-19.
Contributing: Associated Press