Biden says inflation report ‘may delay’ expected interest rate cut
President Biden on Wednesday said that the March report on inflation, which ticked higher, may delay an expected interest rate cut from the Federal Reserve.
Biden last month predicted the Federal Reserve will cut interest rates, a move that could give the president a boost ahead of November's election while he campaigns on his work to improve the economy and combat inflation.
He said on Wednesday, during a press conference with Japanese Prime Minister Fumio Kishida, that he’s sticking with his prediction of a cut before year's end, but there could be a delay.
“This may delay it a month or so, I’m not sure of that. We don’t know what the Fed is going to do for certain,” Biden said.
“But look, we have dramatically reduced inflation from 9 percent down to close to 3 percent. We’re in a situation where we’re better situated than we were when we took office, where inflation was skyrocketing,” he added.
He stressed that he has a plan to deal with inflation and hit at Republicans for having a plan that he argues would cut taxes for the wealthy and raise taxes for other Americans.
“I think they have no plan. Our plan is one I think is still sustainable,” Biden said.
The consumer price index (CPI), a popular measure of inflation, rose 0.4 percent last month and 3.5 percent annually, according to Labor Department data released earlier on Wednesday. The rise is in line with economists' projections and follows February and January reports that showed hotter than expected inflation, with consumer prices rising to 3.2 percent and 3.1 percent, respectively.
The Federal Reserve opted to hold interest rates steady last month, and investors on Wednesday predicted the March inflation data could keep the Fed away from cutting rates through the first half of the year. When the Federal Reserve held rates steady, Chairman Jerome Powell said at the time that the slight uptick in inflation hasn’t “really changed the overall story.”
Biden, during remarks at a March campaign event in Philadelphia, made his prediction about more cuts.
“I can't guarantee it, but I’ll bet you – I’ll bet you those rates come down more because I bet you that that little outfit that sets interest rates is going to come down,” he said.