President Joe Biden on Tuesday pledged he will refrain from meddling on interest-rate policy as he and Treasury Secretary Janet Yellen met at the White House with Federal Reserve Chair Jerome Powell.
“My plan is to address inflation. It starts with a simple proposition — respect the Fed, respect the Fed’s independence — which I have done and will continue to do,” Biden told reporters as the meeting began.
“My job as president is to not only nominate highly qualified individuals for that institution, but to give them the space they need to do their job.”
Biden had made the same point on Monday in a Wall Street Journal op-end, saying he would stand aside and let the Fed do its job — though he also put the blame for rising prices on the institution.
“The Federal Reserve 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 in the op-ed.
“I won’t do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our top economic challenge right now.”
Powell had met in the Oval Office with Biden’s predecessor, Donald Trump, who frequently tweeted criticism at his pick to lead the central bank.
The latest inflation data shows prices rising at a pace not seen in about 40 years, though both the consumer price index and the PCE price index have eased from their peaks. Christopher Waller, a Fed governor, said on Monday that core inflation is not coming down enough to meet the central bank’s 2% target anytime soon.
U.S. stocks DJIA, -0.03% COMP, +0.42% traded slightly higher Tuesday afternoon, as investors kept an eye on the Biden-Powell meeting. The main equity gauges have tumbled this year, with the S&P 500 SPX, +0.14% down about 13%, as investors fret about inflation, the Fed’s interest-rate hikes and the potential for a recession, though they booked sizable gains last week, helped in part by Fed minutes out Wednesday that suggested the central bank is open to rethinking its plans to raise rates to tame inflation.