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US is well positioned to tame inflation, says White House economic chief

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White House economic adviser Brian Deese paused on the cusp of ruling out a US recession while the Federal Reserve fights inflation, saying the central bank needs space to do its job.

r Deese, the director of the National Economic Council, said this approach reflects President Joe Biden’s pledge to make curbing the biggest consumer price hikes in four decades his “top priority.”

“We need to give the Fed the space and independence to do its job of bringing inflation under control,” Mr Deese said on CNN state of the nation yesterday.

“There are always risks,” he said when asked if the US was headed for a recession.

Consumers are experiencing the highest inflation in decades, caused by expansionary fiscal and monetary policies combined with supply shortages and rising food and energy costs in the wake of the Russian invasion of Ukraine.

A consumption-linked price measure closely tracked by the Fed rose 6.6 percent for the 12 months to March, while another measure, the CPI, rose 8.3 percent for the year to April — one of the highest values ​​in decades.

US central bankers say restoring prices to their 2 percent inflation target is their top priority.

They raised the reference rate by half a percentage point earlier this month after raising it by a quarter point in March, and Chair Jerome Powell said the policy committee plans to raise it in half-point increments in the next few meetings.

Mr Powell also said there was a “good chance” that the Fed could ease inflation back towards its 2 percent target without a “severe” downturn or “materially high” unemployment.

Americans are increasingly pessimistic about the economy, the stock market and inflation, according to a CBS News poll released yesterday, which showed the proportion of people saying the economy is bad fell to 69 percent this month has increased, compared to 46 percent in April 2021 and 64 percent last November.

Mr Deese said the US economy was in transition towards “more stable and resilient growth”.

“While there are primarily absolute risks of inflation, this is the most important thing: The United States is better positioned than any other major economy to bring down inflation and address these challenges without giving up all of the economic gains that we have made and that lies in the strength of our recovery,” Mr Deese continued Fox News Sunday.

https://www.independent.ie/business/world/us-well-placed-to-tame-inflation-says-white-house-economy-chief-41676930.html US is well positioned to tame inflation, says White House economic chief

Fry Electronics Team

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