Joe Biden sought to allay fears that rising inflation could hurt the U.S. recovery and undermine his $ 4 billion spending plans, saying the administration will remain vigilant about price growth. and that the Federal Reserve was expected to act in case of need.
Speaking at the White House on Monday, the U.S. president promoted the burst of job creation and economic growth during his first six months in office since pandemic restrictions were lifted and families benefited. of large doses of fiscal stimulus.
But the latest uptick in coronavirus cases due to the spread of the Delta variant and higher inflation figures than those forecast in recent months could jeopardize at least part of the economic recovery, putting a political issue for the president.
Biden insisted that his senior officials still believed that current inflationary pressures would be alleviated over time, but did not underestimate the risk of persistence.
“I want to be clear: my administration understands that if we were to have uncontrolled inflation in the long run, this would be a real challenge for our economy. So while we are confident that is not what we see today, we will remain vigilant to any necessary answer “.
The president also said he had recently spoken with Fed Chairman Jay Powell, and insisted it was important for the central bank to effectively manage inflation.
“The Fed is independent,” Biden said. “It must take all the steps it deems necessary to sustain a strong and lasting economic recovery.”
The president has stepped up pressure on Congress to approve $ 4tn in new spending on infrastructure and the social safety net, which will be rolled out over the next decade and paid for with higher taxes for corporations.
But Republicans have taken advantage of rising inflation to build opposition to plans in Congress, saying the United States cannot allow additional government spending proposals that could squeeze the economy out.
Biden has refrained from arguing that the investments he is proposing – along with his recent executive order promoting greater competition in the private sector – will help reduce prices to benefit consumers over time.
“It will take the pressure,” he said.
In his remarks, Biden contrasted the trajectory of the U.S. economy under his watch with some of Donald Trump’s warnings of economic collapse during the 2020 campaign.
“It turns out that capitalism is alive and well. We are making serious progress to ensure that it works as it is supposed to work: for the good of the American people, ”Biden said.
He said the accumulation of prices in recent months was a natural byproduct of the successful reopening of the world’s largest economy.
“When our economy returns, we have seen some price increases. Some people have raised concerns that they could be a sign of persistent inflation. But that is not our view,” Biden said.
“[The] the reality is that you can’t revive the global economic light and don’t expect this to happen. When demand returns, there will be global supply chain challenges. ”