President Joe Biden used a May 30 op-ed in the Wall Street Journal and a May 31 private meeting at the White House with Federal Reserve Bank Chairman Jerome Powell, to give his full-throated support to the Federal Reserve’s disastrous policies for “fighting inflation.” Biden spoke to the press briefly before going into the meeting with Powell, stating succinctly: “My plan to address inflation starts with a simple proposition: Respect the Fed and respect the Fed’s independence, which I have done and will continue to do.”
In the May 30 op-ed in the Wall Street Journal, Biden had emphasized: “My predecessor demeaned the Fed.… I won’t do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our top economic challenge right now.”
The Fed is a private central bank which represents and implements the policies of the City of London and Wall Street, which for the last 14 years have meant breathless quantitative to the tune of $10 trillion, all to bail out the bankrupt speculative banks. The continuation of the Fed’s policies is as dangerous to the future existence of the human species as is nuclear war.
AP, commenting on both Biden’s op-ed and his meeting with Powell, explained: “Like Biden, the Fed wants to slow inflation without knocking the U.S. economy into recession, a highly sensitive mission that is to include increasing benchmark interest rates this summer. The President said he would not attempt to direct that course as some previous Presidents have tried.”
Joining Biden in his meeting with Powell were Treasury Secretary Janet Yellen and Brian Deese, the White House National Economic Council director. AP notes that Powell emerged from the meeting with “important political cover for a series of sharp interest rate hikes intended to rein in higher prices.” The article further quotes Sebastian Mallaby, a senior fellow at the Council on Foreign Relations and previously the London Economist’s Washington bureau chief, who commented: “The President’s essay was striking because he explicitly backed the Fed.”
There is, of course, a big question as to what “Fed policy” actually is, or will be. Powell has announced the end of Quantitative Easing and a string of 0.5% rate increases this year – the first of which is already causing chaos in various parts of the everything-bubble, especially Third World debt. The hawkish head of the Atlanta Fed, however, has said that there should just be a couple of rate increases, and then in September the Fed will have to loosen again. On the other hand, former New York Fed head William Dudley called for an immediate jump in the Fed rate to 4%, 5% or even 6%.
