Biden says inflation report ‘may delay’ expected interest rate cut

President Biden said Wednesday that a March report showing inflation trending upward could delay expected rate cuts by the Federal Reserve.

Biden last month predicted the Federal Reserve would cut interest rates, a move that could provide a boost heading into the November election as the president works to improve the economy and fight inflation. .

He told a press conference with Japanese Prime Minister Fumio Kishida on Wednesday that he was sticking with his forecast for a rate cut by the end of the year, but said it could be delayed.

“This could delay it by a month or so, but we don’t know about that. We don’t know what the Fed will do specifically,” Biden said.

“But look, we’ve brought inflation down dramatically from 9% to nearly 3%. We’re in a better position than when we took office, when inflation was skyrocketing,” he added.

He emphasized that he has a plan to combat inflation and criticized Republicans for their plan to advocate tax cuts for the wealthy and higher taxes for other Americans.

“I don’t think they have a plan. I think our plan is still sustainable,” Biden said.

The Consumer Price Index (CPI), a commonly used measure of inflation, rose 0.4% last month, for an annualized increase of 3.5%, according to Labor Department data released early Wednesday. The rise is in line with economists’ expectations and follows reports in February and January that showed higher-than-expected inflation, with consumer prices rising to 3.2% and 3.1%, respectively.

The Fed opted to keep rates on hold last month, but investors on Wednesday predicted that March’s inflation data could allow the Fed to avoid cutting rates through the first half of this year. When the Fed kept interest rates on hold, Chairman Jerome Powell said at the time that even with a slight rise in inflation, “the overall picture hasn’t really changed.”

Biden predicted further cuts in remarks at a campaign event in Philadelphia in March.

“I can’t guarantee it, but I’m betting on it. I believe that interest rates will go down further, because I believe that the small organizations that set them will definitely go down,” he said.