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Biden to Stress Fed Independence in Powell Meeting, Deese Says

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© Bloomberg. U.S. President Joe Biden, center, greets Jerome Powell, chairman of the U.S. Federal Reserve, left, in the Eisenhower Executive Office Building in Washington, D.C., U.S., on Monday, Nov. 22, 2021. Biden selected Powell for a second four-year term as U.S. Federal Reserve chair and elevated Brainard to vice chair, maintaining consistency at the central bank as it grapples with the fastest inflation in three decades along with the lingering effects of the coronavirus pandemic.
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(Bloomberg) — President Joe Biden will use his meeting with Federal Reserve Chairman Jay Powell to stress that he’s giving the central bank “space to operate” independently to address the inflation crisis, White House economic adviser Brian Deese said.

“The president is underscoring something important,” Deese said in an interview with Bloomberg Television Tuesday. “The respect for the independence of the Fed as an institution is not something that we can take for granted. It’s not something that prior presidents have done.”

The White House has increasingly sought to shift responsibility for inflation to the Federal Reserve in public comments, as polls show rising prices are the top concern among voters ahead of November’s midterm elections. In an op-ed published Monday in the Wall Street Journal, Biden said the Fed has “a primary responsibility to control inflation.”

“My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation,” Biden wrote. “I won’t do this.”

Former President Donald Trump regularly criticized the central bank, saying it should have been more aggressive in cutting interest rates, and at one point said he was considering demoting Powell. Former Federal Reserve Chair Paul Volcker also said in his autobiography that he was once invited to a meeting with President Ronald Reagan at the White House where aides to the president told him not to raise interest rates before the election.

Deese defended Tuesday’s meeting — which also will include Treasury Secretary and former Federal Reserve Chairwoman Janet Yellen — as “not a photo op” and said that it was “standard practice for presidents and chairs of the Federal Reserve to meet from time to time to share views on the economy.” The meeting is also an opportunity for Biden to show the American public he’s focused on the issue of inflation, Deese said.

“They have a president who is waking up in the morning and focused on how to address that challenge,” Deese said.

©2022 Bloomberg L.P.

Biden to Stress Fed Independence in Powell Meeting, Deese Says

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