Sunday, April 2

Fed nominees say inflation fight is top priority

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US President Joe Biden’s nominees to the Federal Reserve Board came out swinging against high inflation on Wednesday, saying it posed a threat to economic growth and that fighting it is a paramount task for the central bank.

“Our most important task is tackling inflation,” Michigan State University economics professor Lisa Cook, one of three Fed nominees up for a confirmation hearing at the US Senate on Thursday, said in her prepared remarks.

The Fed must “ensure that inflation declines to levels consistent with its goals,” said nominee Philip Jefferson, dean of faculty at Davidson College.

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Reducing inflation must be a “top priority while we continue to sustain our economic recovery,” nominee and former Fed governor Sarah Bloom Raskin wrote.

Fed policymakers have signaled they will start raising interest rates next month, perhaps at a pace not seen in decades, as they scramble to cut short the price spiral that threatens to undermine the recovery from the pandemic upward recession.

Consumer prices rose 7% last near — more than twice the Fed’s 2% goal — cheapening American wages, eating into household budgets, and becoming an increasing political liability for Biden, whose popular standing has suffered as inflation has soared.

The three Fed nominees have been widely seen as leaning dovish, in part because Cook’s research focused on inequality and Jefferson’s on poverty, suggesting that they might tolerate inflation for the sake of a stronger labor market.

Their written testimony released Wednesday appeared calibrated to push back on that assumption.

(Reporting by Ann Saphir and Jonelle Marte; editing by Chris Reese and Richard Pullin)