Joe Biden is set to meet Jay Powell for the first time since his nomination to a second term as chair of the Federal Reserve, highlighting the US president’s concern about high inflation and threat it is posing to the recovery.
According to the White House, the US president and Powell will gather on Tuesday as the Fed and Biden administration battle rising consumer prices, supply chain disruptions, the energy shock triggered by the war in Ukraine and the enduring pandemic.
Biden chose to reappoint Powell for a new four-year stint as head of the Fed last year, bucking progressive calls for him to tap a Democrat for the job rather than a Republican who was elevated to the helm of the central bank by former president Donald Trump. Powell was confirmed by the Senate for a second term on May 13, with strong bipartisan support.
A White House official said Biden would congratulate Powell “on his confirmation and the confirmation of the president’s other nominees to the Fed”.
The official added that the pair would “discuss the state of the American and global economy, and discuss the president’s top economic priority — addressing inflation to transition from a historic economic recovery to stable, steady growth that works for working families”.
Unusually for a president in an election year, with midterm elections due in November to determine control of Congress, Biden is supporting the Fed’s turn towards tighter monetary policy to fight inflation, underscoring just how problematic high prices are becoming both economically and politically for the White House and Democrats.
“While I’ll never interfere with the Fed’s judgments, decisions, or tell them what they have to do . . . I believe that inflation is our top economic challenge right now, and I think they do too,” Biden said earlier this month.
“The Fed should do its job and it will do its job, I’m convinced, with that in mind,” Biden said.
Even though the Fed is an independent institution, US presidents have periodically held both public and private meetings with sitting chairs of the central bank.
Biden last met Powell in November, when he nominated him for a second term as central bank chair. Trump met Powell and Janet Yellen, the Fed chairs during his tenure, and Barack Obama invited Yellen and Ben Bernanke, a former Fed chair, to the White House during his presidency.
The meeting with Powell will give Biden a chance to demonstrate that the fight against inflation is his top priority ahead of the midterm elections, with polls showing voters are rebuking his handling of the economy because of soaring prices even while job growth has been very strong.
The burden of high inflation, particularly with respect to petrol and food costs, will have been even more apparent over the Memorial Day holiday, one of the busiest travel weekends of the year.
Biden and top officials in his administration have insisted that they are using every tool at their disposal to fight inflation, though they are still debating whether to reduce tariffs on Chinese imports in order to reduce some price pressures.
Ultimately, however, they have increasingly pointed to the Fed as the agency with the greatest influence and responsibility for curbing inflation.