As soaring prices undermine wage gains and hurt American families, US President Joe Biden has said tackling inflation is his top priority, but he may have limited tools to tackle the problem.
Biden, whose popularity has taken a hit amid the highest inflation in four decades, spoke on the eve of the release of the latest consumer price data, aiming to get ahead of more news. damaging.
Soaring inflation means Americans are paying more for homes, cars and food, as well as gasoline, which hit a record high on May 10.
While economists believe the surge may have peaked in March, the pain is expected to last for months.
“I want every American to know that I take inflation very seriously, and it is my national priority,” Biden said at the White House.
“I know families all over America are hurting because of inflation.”
The US president has blamed much of the blame for the recent spike on Russian leader Vladimir Putin and his invasion of Ukraine.
The attack in late February caused a sharp spike in energy prices and also pushed up food prices.
“I know you must be frustrated…trust me, I understand the frustration,” Biden said, addressing Americans directly.
The Democrat called out opposition Republicans for their “extreme agenda” and slowing his efforts to manage the strains gripping the economy.
The world’s largest economy has come back strong from the economic damage inflicted by the COVID-19 pandemic, helped by favorable borrowing costs and massive government stimulus.
But with the pandemic still gripping other parts of the world, global supply chain grunts have pushed up prices for cars and other goods, while a flood of new homebuyers have pushed up housing prices.
Meanwhile, the conflict in Ukraine has pushed global oil prices above $100 a barrel.
U.S. consumer prices jumped 8.5% in the 12 months to March, and while economists believe this may be the peak, the rate is likely to remain high in the coming months. Biden assured Americans that the Federal Reserve was acting to ease inflationary pressures.
The U.S. central bank last week announced the largest increase in the benchmark lending rate since 2000, the second hike since March, with more increases to come.
New York Fed President John Williams said Tuesday that policymakers would move “quickly” to “reduce pressure” on the economy.
And he said the Fed had the tools to do so without causing an economic downturn.
“Although the task is difficult, it is not insurmountable,” he said.
Addressing another politically sensitive aspect of the inflation puzzle, Biden said he was considering lifting the tariffs on Chinese goods imposed by his predecessor Donald Trump.
“We are discussing that right now,” he told reporters, adding that “no decision has been made on that.”
Biden is under pressure from some quarters to scrap tariffs in a bid to curb runaway inflation by making US imports cheaper.
Jason Furman, a former White House economic adviser under Barack Obama, said removing tariffs is one of the few things Biden can do to directly tackle inflation.
“That would be the biggest step he could take,” Furman said on MSNBC.
Trump imposed the tariffs to punish Beijing’s allegedly unfair trade practices. Lifting the measures would likely pose a political risk for the White House, which does not want to be called weak vis-à-vis China.