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Biden’s Fed Gamble

Powell and Biden
Jay Powell speaks as President Biden looks on. Photo by: Alex Wong/Getty Images
William D. Cohan
June 1, 2022

Of all the headaches that Joe Biden has faced during his two years in office—the pandemic, obviously; the collapse of his signature multi-trillion (and then trillion-plus) infrastructure package, Afghanistan, the war in Ukraine—the president has seemed particularly miffed about a recent domestic culprit: inflation. Insidiously rising prices, after all, are the sort of things voters feel in their wallets and their guts, especially when they become memorialized via gas prices during the summer vacation season. According to a recent Washington Post report, Biden has for a while been rousing his administration to do more to combat inflation, publicly and privately. During an Oval Office meeting with Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell, Biden declared that addressing inflation remained his top priority. It was a powerful public statement amid a moment when more aid was being shipped to Ukraine, and the pandemic was surging once again.

But in an equally prominent opinion piece in The Journal, Biden also tried to straddle his position. He may be laser focused on curbing inflation, but he isn’t going to meddle with the Fed’s monetary policy. “My predecessor demeaned the Fed,” Biden wrote in the May 30 opinion column, “and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation. I won’t do this.”