President Biden Says Inflation Data May Delay Interest Rate Cuts

U.S. President Joe Biden, who faces former president Donald Trump in a presidential election in November, acknowledged Wednesday that still-strong inflation likely means the Federal Reserve may hold off on cutting interest rates for a bit longer. The latest inflation data has prompted speculation about the timing of future rate adjustments.

President Joe Biden said, “prices are still too high” but took credit for taming inflation that soared at the end of the pandemic, prompting the Fed to sharply raise rates. While acknowledging persistent inflation, Biden reiterated his expectations for eventual rate cuts.

Biden had previously suggested that lower inflation would lead the Fed to cut rates, but he hedged that prediction on Wednesday. “This may delay it a month or so,” Biden said, indicating a slight shift in his outlook based on the most recent economic reports.

Despite the concerning inflation figures, President Joe Biden said he stands by his prediction that the Federal Reserve would cut interest rates by the end of the year, despite a new report showing persistent price pressures. He emphasized the need to balance fighting inflation with supporting economic growth.

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. He believes the underlying economic fundamentals remain strong and will eventually lead to a more dovish stance from the Fed.

President Joe Biden on Wednesday said he still expects an interest rate cut by the Federal Reserve before the year is out, when he was asked about today’s hotter-than-expected inflation numbers. The administration maintains that its policies are contributing to a gradual easing of inflationary pressures, paving the way for future rate reductions.