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The Federal Reserve seeks to slow rising inflation and notes the possibility of the United States suffering from higher unemployment, declining economic growth and recession, potentially creating more problems for the Biden administration.
Republicans have already blamed the Democratic Party administration and lawmakers for inflation levels unprecedented in 40 years, citing last year’s COVID-19 stimulus just as the nation prepares for November’s by-elections.
BEN BERNANKE EVALUATES FED, POWLE AND INFLATION
President Joe Biden and the White House COVID-19 Response Team engage in a virtual conversation with the National Association of South Court Audience Managers at the Eisenhower Executive Office Building on the White House on Monday, December (Kent Nishimura / Los Angeles Times via Getty Images / Getty Images)
“This president and his fully democratic government are the ones who are draining the pocketbooks of American families, and every poll shows that our citizens understand this sad reality all too well,” said Senate Minority Leader Mitch McConnell, R-Ky. in recent speeches on the floor of the Senate.
President Biden has been facing high inflation since last year, and Russia’s war in Ukraine, which began in late February, has caused additional economic complications.
In April, consumer prices rose 8.3 percent from a year earlier, forcing Americans to pay more for gasoline, groceries and other expenses.
What’s worse is that fears of a recession that is likely to come in 2023, according to some estimates, paint a bleak new perspective for the US economy.
The president and his economic team insist the economy is in a good place to withstand failure, stressing factors such as a strong labor market and low unemployment.
“Our economy is transitioning from the strongest recovery in modern American history to a period of more stable and sustainable growth that works better for families,” National Economic Council Director Brian Deese told CNN on Sunday. . “
INFLATION INCREASES 8.3% IN APRIL, WHICH IS SEEN NEARLY 40 YEARS OLD
Director of the National Economic Council Brian Deez talks about rising food prices at a White House briefing on September 8, 2021 in Washington, DC (Photo by Kevin Dietsch / Getty Images / Getty Images)
As part of efforts to improve Americans’ views on the economy, Biden will travel around the country to push through his claims of recovery. He is also trying to convince voters that his administration is proposing better economic policies than Republicans. The administration says the Republican Party will not do enough to curb inflation and will seek to raise taxes on American families.
Recent polls suggest the economy ranks high on the electoral priority list, and Republicans point to the current state of the economy in an attempt to increase their chances of taking control of Congress.
Federal Reserve Chairman Jerome Powell told The Wall Street Journal last week that “there may be some pain” in efforts to reduce inflation and that the United States may see small jumps in unemployment.
Deese said Sunday that the White House supports the Fed’s response.
“We need to give the Fed space and independence to do its job, namely to keep inflation under control,” he said.
IS A RECESS COMING? WALL ST. TAGS IN
A man is shopping at the Safeway grocery store in Annapolis, Maryland, on May 16, 2022, as Americans prepare for a summer shock of stickers as inflation continues to rise. (Photo by JIM WATSON / AFP via Getty Images) / Getty Images)
Larry Summers, Treasury Secretary under former President Bill Clinton, told the WSJ earlier this month that he believed a recession was more likely to occur in the next two years.
“I think the risks are quite significant,” he said.
Biden continued his efforts to impose higher taxes on rich and large corporations to finance investments in social programs.
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The administration said these social programs would cut costs for everyday Americans, but the president’s Build Back Better proposal, which includes these initiatives, failed to pass through the Senate after Democratic West Virginia Sen. Joe Manchin and Republicans opposed the measure. warning that rising spending will exacerbate the problem of inflation.
The Wall Street Journal contributed to this report.
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