U.S. President Joe Biden said on Thursday he expects the Federal Reserve to keep cutting interest rates and pledged that his administration would keep working to lower the cost of living for Americans.
Biden, at an Economic Club of Washington event attended by 500 guests, promoted his administration's policies to reduce inflation in the wake of the coronavirus pandemic and the conflict between Russia and Ukraine, issues that have fueled voter anxiety.
"Interest rates are going to go down and are expected to go down further. That's good for our situation," Biden said.
Biden said inflation has moved closer to the Fed's 2% target and called the Fed's 50 basis point rate cut "good news for consumers."
Biden added: "I'm not here to celebrate a victory, we have more work to do."
Many economists had predicted a recession would be needed to reduce high inflation, but Jeff Zients, the president's chief of staff, said on a call with reporters that such predictions have so far proven wrong. Biden's policies to expand domestic manufacturing, invest in clean energy and other infrastructure and cap drug costs for seniors have helped create 16 million jobs and boost wages.
Polls show Americans remain deeply concerned about the economy and inflation. With less than seven weeks until the Nov. 5 election, Harris, who became the Democratic presidential nominee after Biden dropped out of the race in July, is virtually tied with Trump in the polls.
A Reuters/Ipsos poll released this week showed Trump has the edge on handling inflation, which has surged to its highest level in 40 years under Biden, with 43% of respondents saying Trump is more likely to "lower the prices of everyday items like groceries and gasoline," compared with 36% who chose Harris.
In a speech after announcing the super-sized rate cut on Wednesday, Fed Chairman Jerome Powell said the economy remains strong but policymakers want to stay ahead of the curve and prevent any weakness in the job market. The current unemployment rate of 4.2% is more than 50 basis points higher than in March 2022 when the Fed begins its aggressive rate hikes.
National Economic Council Director Lael Brainard said on the same call with reporters that the Fed's rate cuts sent a "clear signal that inflation has come back down," noting that inflation levels are now back to where they were before the coronavirus pandemic began.
She also mentioned that the decline in mortgage rates that has already occurred will save the average homebuyer $5,000 a year, and that this amount will increase as rates fall further. But Brainard added that more needs to be done to reduce housing costs and support child care needs.
An administration official, speaking on condition of anonymity, said the White House was watching escalating tensions in the Middle East but saw no significant risk to the overall economic outlook.
The article is forwarded from: Jinshi Data