Biden meets with Fed chair in push to address record inflation

Judy Woodruff:

As we reported, President Biden met today with Federal Reserve Chairman Jerome Powell as part of a White House push aimed at addressing the country's high inflation rate.

Brian Deese is the director of the White House National Economic Council. And I spoke with him moments ago.

Brian Deese, welcome back to the "NewsHour."

What can you tell us about this conversation today between the president and Chairman Powell?

Brian Deese, Director, National Economic Council:

Well, they had a productive meeting.

And what the president communicated to the chairman was that he not only respects the independence of the Federal Reserve, but that he intends to honor it and give the Federal Reserve the space that it needs to tackle inflation.

The Fed has a primary role in fighting inflation. And it is well on its way to do that. And the president wanted to be very clear that, unlike some of his predecessors in the office, as president, he was going to respect their independence.

Judy Woodruff:

Is that part of a strategy, if you will, Brian Deese, for the president to, in effect shift responsibility to the Fed for inflation?

Brian Deese:

No, it's not about responsibility. It's about actually fighting inflation in a responsible way.

The president laid out a plan. The first element of that is to give the Fed the space that it needs. And, importantly, that has not always been the case. That wasn't true with the prior president. And when you have a president that seeks to politicize the Fed, then you're going to get worse economic outcomes.

But the president is also focused on steps that he can take and that he can work with Congress to take both to lower costs for families to try to make things more affordable for families during this transition and also to lower the federal deficit. We know that, if we lower the federal deficit, that will help ease price pressures in the economy, has laid out specific steps in both of those areas as well.

So this is about a president saying his top priority is tackling inflation. And one of the things that he can do is actually strengthen the independence of the Fed, rather than politicize it.

Judy Woodruff:

Did the two men also discuss other steps the president can take?

We saw in that Wall Street Journal op-ed the president wrote that ran today that he talked about the Strategic Petroleum Reserve. He talked about fixing broken supply chains. He talked about infrastructure.

I'm asking because these are — these things may be important in the long run. They're not intended to help inflation in the short run, though, are they?

Brian Deese:

Well, the meeting was broad-ranging and talked about a range of topics, including the current and future economic outlook.

But, when you talk about those types of steps that are intended to address the cost of gas at the pump or groceries, as well as the other everyday costs that typical American families are facing, the president is focused on both the steps that we can take that are immediate and the steps that are medium-term.

So, something like releasing barrels from the Strategic Petroleum Reserve, that happens right away. The president has directed that happened now. Something like trying to work with farmers to grow more crops this year is something that would help to ease food prices right now.

But you're absolutely right. Some of these steps are more medium-term. But the sooner that we take them, the more that we could have impact in the economy. Like, building more affordable housing, that's going to take some months to do. But, if we start right now, as the president has directed, we're going to see more easing of housing prices over the course of the year and into next.

So we're focused on the immediate term, but also the medium term as well.

Judy Woodruff:

I'm asking because we know that, what is that, the average price of gasoline in the United States is something like $4 — more than $4.60 a gallon.

Brian Deese:

Absolutely.

And it's — the president knows that that is on the minds of typical families as they're pulling up to the gas pump, and it creates anxiety for families as well. This is an unfortunate consequence of Putin's decision to invade Ukraine. And you can see that, from the period when Putin began amassing troops on the Ukrainian border until now, the price of gas at the pump is up about $1.50, because the actions that we have taken are focused on trying to keep Putin from being able to refill his war machine with revenues from oil and gas.

But, at the same time, we're looking for every step that we can take to try to boost supply outside of Russia to try to bring some moderating impact on prices. That's what the Strategic Petroleum Reserve was about. And that's why the president is so focused on this constant diplomacy of working with European allies, working with other oil-producing countries around the world, to do everything we can to get other supply onto the market.

Judy Woodruff:

As you know, well, Brian Deese, there are economists who were saying well into — well over a year ago that inflation was looming and it was coming. One of those was former Treasury Secretary Larry Summers.

Is the White House, is the president now acknowledging that he was late, the White House was late to address inflation?

Brian Deese:

Look, I think, if you look out on the global landscape right now, it is clear that inflation is a global problem.

We saw inflation in the Eurozone hit 8.1 percent last month. We saw in the U.K. inflation hit 9 percent. And that is because the principal drivers here are a pandemic shutting the economy down and turning it back on, and now compounded by Putin's war in Ukraine.

I think what's striking, if you look across the globe, where everyone is dealing with elevated inflation, is that the United States is actually well-positioned to address prices head on because of the strength of our economic recovery.

We have seen a historic labor market recovery. We have record business investment, new business creation right now. And household balance sheets are doing pretty well. That's a function of the strength of this recovery. And so, amidst a global challenge, we are better positioned.

Now, that doesn't relieve the anxiety that typical families are facing. But we do now have the tools to take on the price increases head on.

Judy Woodruff:

But I'm asking, would it have been better had the White House seen this sooner, as others did?

Brian Deese:

Look, I think, if you look at the steps that we took, they helped to generate this historically strong recovery.

And most analysts that have looked at this and said that the principal driver inflation was not fiscal policy, but was instead the issues that I just addressed.

The truth of where we find ourselves now is, the United States has those historic economic strengths behind us. We're able to focus on fighting these prices — price increases directly because of them. And I think that that's what the president is focused on now.

How can we make progress? How can we continue to build on these historic gains? And if we follow through on these policies, there's every reason why we can.

Judy Woodruff:

Brian Deese at the White House, thank you very much.

Brian Deese:

Thanks, Judy.