US (Washington Insider Magazine) – President Biden has made it clear it is the Federal Reserve’s responsibility to the U.S. Economy to recalibrate policy in the face of skyrocketing prices and recovery strength.
The president is currently emphasizing the importance of the Federal Reserve within the U.S. fiscal management system, and has put the burden of the avoidance of elevated price permanency on their shoulders. The Biden Administration has repeatedly pointed out that the Reserve has been given a dual presidential mandate of complete employment and price stabilization.
Biden also believes the White House and Congress could play a major role in helping inflation by turning their attention to mitigating supply chain issues, encouraging competition in the economic free market, and making sure the Build Back Better budget plan gets passed into law, which could help families mitigate various costs. This law would mainly apply to families in lower tax brackets, and help them elevate to a higher quality of life. At this moment, lawmakers are in contention over the Build Back Better plan, with many citing the potential for tax increase on the middle class as a problematic point.
Policymakers have shared that interest rates will rise several times through the year, most likely beginning in March, to help combat rapid inflation, which is at its highest rate in almost 40 years. The Fed’s balance sheet of $8 trillion would likely face cuts following the rising inflation.
Fed Chairman Jerome Powell promised at his renomination hearing that he wouldn’t allow this issue to spiral and would work diligently to curb it. He also mentioned a tighter policy stance would be required to keep the economy-boosting.
Biden has warned the U.S. Senate against dragging its feet on confirming his recent nominations to the Federal Reserve Board in an effort to stabilize the body and get the ball rolling in tackling the turmoil American consumers are facing every day.
Earlier this month, Biden nominated Former Governor, Sarah Raskin, and two black economists, Lisa Cook and Philip Jefferson, to join the Federal Reserves Seven Member Board. These nominations will make the Federal Board the most diverse it’s ever been in its 108-year history.
These measures come on the heels of the recent COVID-19 Omicron spike that almost led to another nationwide shutdown, which would have left many businesses with no choice but to shut their doors again for an indefinite amount of time.
In hopes of avoiding another shutdown, the public is looking to Capitol Hill for policy and provisions to help them through the inclines in the prices of fuel and other common goods. The supply chain issues, as well as labor and wage disputes, are amongst the primary concerns for many Americans. The Biden administration is hoping to absolve these issues and capitalize on the steady decline of unemployment in 2021.
“The inflation has everything to do with the supply chain,” said Biden while also highlighting this administration’s plan to help promote competition.
According to a recent poll by CBS News, two-thirds of Americans believe President Biden isn’t being attentive to the effects of inflation on the economy. As a result, Biden’s approval ratings have begun to plummet despite Biden’s economic team predicting the rising prices eventually subsiding later this year.
The Biden Administration is hopeful things will turn around for the American citizens.