Joe Biden, president of the United States, met Jerome Powell, president of the central bank, to discuss issues related to the economy and has promised to respect the autonomy and independence of the Federal Reserve in managing and controlling inflation.

The meeting was held in the framework of the beginning of the second term of the Fed president, in which Biden confirmed that the Federal Reserve “has the primary responsibility for controlling inflation. (…) My predecessor demoted the Fed and previous presidents have tried to influence its decisions inappropriately during periods of high inflation. I will not do it.”

The US authorities have to deal with different problems such as firearms control, abortion, immigration, the war between Russia and Ukraine. But the problem that generates the greatest concern is the increase in the prices of products and services, it is to say inflation.

President Biden’s plan to deal with inflation means to allow the Fed to do its job. “The fight against inflation begins with a simple proposal: respect the Fed, respect the independence of the Fed, which I have done and will continue to do”, the American president pointed out.

The president promises to give those responsible for the central bank “the space they need to do their job, not interfere in their critically important work, which has a double responsibility: one for full employment, two for stable prices.”

Inflation, a global problem

The inflation problem has become a global phenomenon. It has increased markedly in the United States and has registered historical maximums in the entire European zone, and in Latin America it also increases significantly. “It actually rises throughout the world.”

The difficulties that have arisen throughout the process or in the supply chain, the increase in the different raw materials, particularly energy sources such as oil; the cost of food, and financial and monetary policies are indicators that have impacted significantly on global inflation.

Treasury Secretary Janet Yellen, who was also present at the meeting, told CNN that she was wrong to underestimate the growth of inflation. “There have been large and unforeseen shocks to the economy that have sent food and energy prices skyrocketing and also supply bottlenecks that have severely affected our economy and that I, at the time, did not fully understand, but that we now recognize,” she indicated.

M. Rodríguez

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Source: elpais.com

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