“I want every American to know that I take inflation very seriously,” Trump said the day before the April inflation figures were released.
Some “of the roots of inflation” are beyond “my control”, he however acknowledged, incriminating the Covid-19 pandemic and the effects of the war in Ukraine, “two main contributors (…) global in nature”.
“This is why we are witnessing historic inflation in countries around the world,” he insisted, pointing out that this was not an evil specific to the United States.
In March, 60% of inflation was due to rising prices at the pump, caused by the Russian-Ukrainian conflict, he also highlighted.
Economists expect lower inflation for April after a level not seen since the early 1980s the month before.
With the approach of the mid-term elections and afflicted with a mediocre popularity rating, Joe Biden must reassure Americans who are unconvinced by his economic policy.
The Republicans do not fail to recall that inflation had started to climb long before the war in Ukraine.
If the president has no control over the war in Ukraine and the pandemic, he hammered that he could act on other fronts.
On Monday, he had already announced a drop in the prices of internet subscriptions.
“There are things we can do, we can tackle what we need to do, starting with the Federal Reserve (Fed), which plays a huge role in fighting inflation in our country,” he said. he resumed on Tuesday.
So he urged the Senate “to confirm without delay” the appointments of “highly qualified candidates” he has proposed to lead the Fed.
Joe Biden, however, took care to specify that there was no question of interfering in the decisions of the institution. “They are independent,” he said.
The US central bank has already started to raise its key rates to slow consumption and investment.
And it should act “quickly to bring policy rates back to more normal levels this year” after bottoming out during the pandemic to support the economy, New York branch president John Williams said on Tuesday. , at a conference in Germany of the Bundesbank and the National Association for Business Economics.
That is to say raise them to around 2 to 2.50%, against 0.75% to 1% currently. The Fed had raised them by a quarter of a percentage point in mid-March, then by an additional half point on May 4, the first turn of the screw of this magnitude since 2000.
– “Very uncertain trajectory” –
The monetary institution has also already announced that other increases of half a percentage point will be on the table at the next two meetings, June 14-15 and July 26-27.
According to John Williams, the Fed has “the right tools to achieve (its) objectives”.
“We have an advantage over previous inflationary episodes: our monetary policy tools are particularly powerful in the very sectors where we see the greatest imbalances and signs of overheating, such as durable goods and housing,” he said. he also felt.
On Tuesday, Joe Biden was also asked about the possibility of removing customs duties imposed by his predecessor Donald Trump on the equivalent of 350 billion Chinese goods annually and which could slow the rise in prices.
“We are discussing it, no decision has been made yet,” the White House host said.
These surcharges are due to expire on July 6 and the services of the Trade Representative announced last week that they had launched a consultation to modify or even eliminate them.
Finally, asked about the duration of this inflationary pressure, Joe Biden quoted economists: most expect prices to moderate this year, others believe that it could last until next year.
“I can’t predict it,” he said, sounding cautious after long claiming high inflation was “temporary.”
“The trajectory of inflation remains very uncertain,” acknowledged Treasury Secretary Janet Yellen during a Senate hearing.
In addition to the pandemic, the lockdowns in China are compounding problems in supply chains, she observed.