March’s Hot Inflation Report is a Political Blow to Biden


President Biden said on Wednesday that he still expected the Federal Reserve would cut interest rates this year despite a re-acceleration in price growth across the economy, though he said new data suggested that cut might be pushed to later in the year.

“I do stand by my prediction that before the year is out, there will be a rate cut,” Mr. Biden said at a news conference alongside Prime Minister Kishida Fumio of Japan, after the two of them met at the White House.

“This may delay it a month or so — I’m not sure of that,” Mr. Biden said. “We don’t know what the Fed is going to do for certain. But look, we have dramatically reduced inflation.”

Mr. Biden’s comments dipped a toe into what has historically — with notable exceptions — been a taboo subject for presidents: weighing in on Fed policy. Many of Mr. Biden’s predecessors have refrained from even speculating about interest-rate decisions, citing the Fed’s independence. The president’s immediate predecessor and now re-election opponent, Donald J. Trump, broke from that history, by frequently and loudly criticizing the Fed when he was president and demanding the central bank to reduce interest rates.

Mr. Biden’s aides talk frequently about the need for the central bank to remain independent. His comments, even though they were more in the vein of punditry than directive, risked, albeit slightly, blurring that line.

Mr. Biden has been banking on cooling inflation — and ensuing rate cuts — to lift his re-election prospects.

The president and his aides have publicly cheered the retreat of annual inflation rates over the past year, after watching the fastest price growth in 40 years dent the president’s approval ratings earlier in his tenure.

They have been anxious for inflation to fall even further, in order give relief to consumers and to potentially spur the Federal Reserve to cut interest rates — a move that would help to drive down borrowing costs for mortgages, car loans and other consumer credit. Mr. Biden has been particularly focused on home buyers, including young voters who are key to his electoral coalition, and who are struggling to afford high housing prices as mortgage rates remain around 7 percent.

Wall Street analysts saw Wednesday’s surprise pickup in the inflation rate as a sign that the Fed could leave rates on hold for months longer than expected. That could mean no cuts before the November election, a campaign where Mr. Biden’s Republican opponent, former President Donald J. Trump, has slammed Mr. Biden for both rapid price increases and high borrowing costs.

The news comes as polls have begun to show Americans’ views of the economy slowly improving over recent months. Democratic pollsters have also pointed to recent surveys as a road map for how Mr. Biden should talk about inflation in the months to come: They suggest American voters blame corporate greed, more than government spending, for price increases. Mr. Biden has leaned into that message, including calling out companies in his State of the Union address for keeping prices high.

He struck a similar tone on Wednesday in a statement that emphasized consumer frustration with inflation.

“Prices are still too high for housing and groceries, even as prices for key household items, like milk and eggs, are lower than a year ago,” Mr. Biden said. “I have a plan to lower costs for housing — by building and renovating more than two million homes — and I’m calling on corporations, including grocery retailers, to use record profits to reduce prices.”


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