President Joe Biden’s top economic adviser said US inflation is trending toward lower levels and downplayed chances of a recession hitting the US economy.
(Bloomberg) — President Joe Biden’s top economic adviser said US inflation is trending toward lower levels and downplayed chances of a recession hitting the US economy.
White House National Economic Council Director Lael Brainard credited Biden’s policies for those developments during a Wednesday speech to the Economic Club of New York. The address was part of a series of appearances by top administration officials aimed at burnishing the president’s economic record ahead of the 2024 election.
“Just today, we saw new and encouraging evidence that the economy is on the path to moderate inflation accompanied by a resilient jobs market,” Brainard said.
The former Federal Reserve board member took a shot at economists who said fighting inflation would crush the jobs market, saying “the economy is defying predictions that inflation wouldn’t fall absent significant job destruction.”
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Brainard’s speech comes hours after the White House received welcome news that US inflation hit a two-year low. Republicans have criticized spending legislation Biden has championed for fueling price increases, so the new data provides the president with fresh material to rebut those arguments.
Americans are still struggling with higher prices, and Biden receives poor ratings on the economy, a major political vulnerability that could hamper his effort to win a second term. The White House has sought to persuade Americans his policies are working by touting his platform, which it is calling Bidenomics.
“These economic gains haven’t happened by chance, they won’t be sustained absent a deliberate strategy,” Brainard said.
Brainard said excess profits have driven inflation and called on companies to “bring their markups down” to help lower prices “after having raised them to unusually elevated levels over the past two years.”
The regional banking crisis has largely been contained as a threat to the overall US economy, Brainard said, adding that policymakers remain on alert for any weaknesses.
“Our sense is that liquidity is actually being managed much better at some of these institutions where regulations had been weakened prior to that,” she said. “It’s important for senior executives at institutions to be carefully monitoring for all manner of risks and to continue strengthening balance sheets and managing liquidity.”
Investments in clean energy, domestic semiconductor manufacturing and infrastructure projects contained in Biden’s signature legislation are already helping boost the economy, according to Brainard. They will help the US in the long term by making the nation less vulnerable to global economic shocks, like a trade war with China or Russia’s invasion of Ukraine.
“It’s vital to make public investments in our own economic future, to safeguard strong pathways to the middle class in communities around the country and to ensure our supply chains are resilient,” she said.
(Updates with comments about regional banking crisis in 9th paragraph)
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