Biden pledges adherence to central-bank independence as he meets with Fed chief Powell

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President Joe Biden promised on Tuesday that he would refrain from intervening in interest rate policy, as he and Treasury Secretary Janet Yellen met at the White House with the Federal Reserve Chairman. Jerome Powell.

“My plan is to address inflation. It starts with a simple proposal: respect the Fed, respect the independence of the Fed, which I have done and will continue to do,” Biden told reporters as the meeting began.

“My job as president is not just to appoint highly qualified people for this institution, but to give them the space they need to do their job.”

Read more: Biden meeting on Fed inflation with Powell considered “politically good for president”

Biden had done the same on Monday in a Wall Street Journal comment, saying he would step aside and let the Fed do its job, though he also blamed the price hike on the institution.

“The Federal Reserve has the primary responsibility for controlling inflation. My predecessor downgraded the Fed and previous presidents have tried to influence their decisions inappropriately during periods of high inflation,” Biden wrote in the edition. of opinions.

“I will not do that. I have appointed highly qualified people from both sides to lead this institution. I agree with their assessment that the fight against inflation is our main economic challenge right now.”

Powell had met in the oval office with Biden’s predecessor Donald Trump, who often tweeted criticism of his choice to head the central bank.

The latest inflation data show that prices are rising at a rate not seen in about 40 years, although both the consumer price index and the PCE price index have fallen since its peaks. Fed Governor Christopher Waller said Monday that core inflation is not falling enough to reach the central bank’s 2% target soon.

US DJIA shares,

+ 0.43%
traded slightly higher on Tuesday afternoon as investors kept an eye on the Biden-Powell meeting. The major equity indicators have fallen this year, with the S&P 500 SPX,
+ 0.15%
a 13% drop as investors worry about inflation, Fed interest rate hikes and the potential for a recession, although they made considerable gains last week, helped in part for the Fed minutes on Wednesday that suggested the central bank is open to rethinking plans to raise rates to control inflation.

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