Biden finds himself tethered to Fed's inflation fight
The political implications could be dire.
Fed officials have vowed not to let up in their fight against inflation, even if it means driving the economy toward a recession. The central bank has already boosted interest rates to a range officials believe will slow the economy — and it plans to raise them again before the end of the year, even at an expected cost to the job market.
"If unemployment goes up, that's unfortunate. If it goes up a lot, that's really very difficult," said
"But price stability makes the future better," Evans added.
Fed officials have made clear that they will keep raising interest rates until inflation comes down regardless of its impact on the unemployment rate, which they expect to rise next year.
Fed officials see the jobless rate rising to 4.4 percent by the end of 2023, according to projections released last month, up nearly 1 percentage point from the 3.5 percent unemployment rate in September.
That would force at least 1 million Americans out of their current jobs and consign countless more to fewer hours and stagnant wages — all while prices continue to rise.
While a recession is unlikely before the November midterm elections, a downturn in 2023 could be devastating for Biden's potential reelection bid and the
And though the Biden administration does not control the Fed, the president appointed five of its seven board members to their current positions, tying him to the fate of the bank's battle against rising prices.
Biden's political fortunes and the economy at large have already been tested by stubbornly high inflation.
Prices were up 6.2 percent on the year in August, according to the personal consumption expenditures (PCE) price index, the Fed's preferred gauge of inflation.
Monthly inflation also accelerated in August, and economists are bracing for the Thursday release of new consumer price index (CPI) data for September. While the Fed ties its inflation fight to the PCE index, the bank also pays close attention to the CPI for its broader influence over businesses and financial markets.
"Inflation is swiftly moving through the real economy, causing rents to move higher at a time when real wages remain flat at best. These dynamics require the Fed to lift its policy rate," wrote
"The economy is shrinking, inflation is raging, and job growth is slowing," said Rep.
"No wonder so many Americans have lost faith in
"Our economy created 263,000 jobs last month. That's 10 million jobs since I've come into office. That's the fastest job growth at any point of any president in all of American history. Historic progress," Biden touted in a Friday speech after the release of the September jobs report.
While the Fed is set to stay on track for higher rates, some
Fed Vice Chair
"The combined effect of concurrent global tightening is larger than the sum of its parts," Brainard said.
Know Future Outlook of Crop and Livestock Insurance Market: Key Players Lloyd's, Aon, QBE Insurance, AXA, Sompo Holdings
One simple 'trick' to improve the economy
Health/Employee Benefits News
Life Insurance News