Biden’s Claim About Not Speaking with Fed Chair Powell: Fact or Fiction?
President Joe Biden made a claim that has stirred up discussions around his interactions with Federal Reserve Chairman Jerome Powell. During his Sept. 19 remarks at the Economic Club of Washington, D.C., Biden stated that he had not spoken with Powell since assuming the presidency. This claim was seen as a demonstration of Biden’s respect for the Federal Reserve’s independence, contrasting himself with his predecessor. However, fact-checkers were quick to scrutinize the accuracy of this statement. Was Biden’s claim entirely true, or was it a misstep in the facts?
A Closer Look at Biden’s Remarks
In his speech, Biden referenced recent Federal Reserve actions, including a rate cut, stating that inflation in the U.S. was gradually decreasing. However, he cautioned that more work needed to be done to fully stabilize the economy. Within this context, Biden emphasized his approach to dealing with the Federal Reserve, highlighting the importance of the institution’s autonomy.
Biden specifically claimed, “And unlike my predecessor, I respect the Federal Reserve’s independence as they pursue their mandate to bring inflation down. That independence has served the country well. And, by the way, I’ve never once spoken to the chairman of the Fed since I became president.” The statement was meant to reinforce his hands-off approach toward the Federal Reserve’s decision-making process, implying that he had never interfered with Powell’s handling of economic issues, such as interest rates.
Fact Check: Biden’s May 2022 Meeting with Powell
While Biden’s statement may have been intended to highlight his respect for the Federal Reserve, it quickly became a subject of debate. Upon further investigation, Biden’s claim that he had not spoken with Powell since taking office was found to be inaccurate. In fact, Biden met with Powell in May 2022, more than a year into his presidency.
According to PBS, Biden and Powell met on May 31, 2022, to discuss inflation concerns. A video from the meeting shows the two sitting across from each other, directly contradicting Biden’s recent remarks. The Federal Reserve’s official calendar for May 2022 also confirmed that Powell had a scheduled meeting with Biden at 1:15 PM on May 31. This concrete evidence invalidates Biden’s claim, raising questions about the accuracy of his statement.
Did Biden Mean Interest Rates Specifically? A Clarification Attempt
In response to the fact-checking, a White House spokesperson attempted to clarify Biden’s statement. According to the spokesperson, Biden was not referring to his lack of communication with Powell in general, but rather to the specific subject of interest rates.
Jared Bernstein of the Council of Economic Advisers stated, “He did not pressure Powell and has never done so. In fact, in the speech today, that was in the section about Fed independence and about the importance of respecting and honoring that independence. It’s obviously a stark contrast with our predecessor. Never has the president spoken to Chair Powell about interest rates as president, never has he pressured him.”
The clarification provided by the White House suggests that Biden’s statement was meant to emphasize that he never discussed interest rates specifically with Powell, rather than implying that no conversations had taken place at all. This nuanced explanation softens the claim but does not entirely resolve the issue of factual accuracy.
The Importance of Federal Reserve Independence
Biden’s emphasis on Federal Reserve independence is rooted in the historical significance of maintaining separation between the government and the central bank’s decision-making. The Federal Reserve, which is tasked with controlling inflation and maintaining stable prices, must be free from political pressure to effectively manage monetary policy.
By stressing that he had not spoken to Powell, Biden sought to contrast his administration’s approach with that of former President Donald Trump, who was often vocal in criticizing Powell and the Fed’s decisions on interest rates. Trump frequently pressured the Fed to lower interest rates to boost economic growth, which some argued jeopardized the institution’s impartiality.
The Larger Context: Powell’s Role and Inflation
Jerome Powell has been central to the U.S. economy’s navigation through turbulent waters, particularly in the wake of the COVID-19 pandemic and rising inflation. The Federal Reserve has been focused on controlling inflation through interest rate adjustments, which are a key tool in its arsenal. However, the Fed’s actions, such as rate cuts or hikes, directly impact the economy, influencing everything from mortgage rates to the stock market.
As inflation surged in 2021 and 2022, Powell and the Fed took aggressive action to raise interest rates, aiming to cool down an overheated economy. Biden’s administration has largely supported Powell’s moves, though the economic pressure on American households has remained a sensitive topic. The President’s hands-off approach was intended to let Powell act independently without overt political influence.
Comparing Presidential Approaches to the Fed
Biden’s speech attempted to underscore a key distinction between his administration and Trump’s in relation to Federal Reserve independence. Trump’s administration was characterized by frequent and sometimes public clashes with Powell, with the former president urging lower interest rates to spur economic growth. On several occasions, Trump openly criticized Powell, even considering firing him at one point.
In contrast, Biden’s administration has largely avoided commenting on the Fed’s decisions publicly, emphasizing a more measured and less interventionist stance. This approach is seen as respecting the boundaries of the institution, allowing Powell to act according to economic indicators without political pressure.
Final Verdict: A Misleading Claim
While Biden’s broader message about respecting the Federal Reserve’s independence remains true, his specific claim about never having spoken to Powell since becoming president is demonstrably false. The meeting in May 2022 provides clear evidence that communication between the two has occurred, even if it did not involve interest rates.
In the end, Biden’s claim highlights the importance of accurate communication, especially in matters as sensitive as economic policy. While the intent may have been to emphasize the administration’s respect for the Fed’s autonomy, the inaccurate statement detracts from the overall message. Moving forward, maintaining clear and truthful communication will be essential in navigating the complex relationship between the government and the Federal Reserve.
