Fed's Powell inflation message clashes with White House

The Federal Reserve announced it would raise rates for the first time in three years on Wednesday to combat hot inflation, but one remark from Fed Chair Jerome Powell appears to directly clash with the Biden administration’s messaging regarding high prices. 

"Given you’re not actually confirmed, and Governor Brainard is not actually confirmed, has there been any impact on your job or the Fed's ability to handle inflation?" asked FOX Business’ Edward Lawrence.

"None whatsoever," Powell answered curtly. 

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The response from Powell contrasts starkly with White House talking points over the last month, when administration officials have been quick to blame inflation problems on "AWOL" Republicans obstructing Federal Reserve nominees. 

"[President Biden] agrees that Republicans are AWOL on the fight against inflation. And at this pivotal moment in our economy, everyone understands we need a full Federal Reserve board, the first one in nearly a decade, to tackle inflation and bring prices down for American families," White House press secretary Jen Psaki said in a Feb. 16 briefing. 

Psaki didn’t stop there, insinuating that Republicans were not fulfilling the duties of their jobs titles for harboring hesitations with controversial nominees such as Sarah Bloom Raskin.

"All we're asking is for Republicans to show up and do their job. … Not showing up … is not delivering on the commitment you made to the American people when they elected you," Psaki claimed. 

Just a day before that briefing, Psaki said the Republicans blocking President Biden’s nominees were "irresponsible."

"That’s totally irresponsible in our view. It’s never been more important to have confirmed leadership at the Fed to help continue our recovery and fight inflation," Psaki said.

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"Republicans are out there saying inflation’s a problem. I’s a huge issue — we agree. And then they’re not even bothering to show up to even vote against these nominees to the Federal Reserve. What message does that send to the American public?" she continued.

Now, Powell’s response threatens to undermine some of the messaging the White House has carefully crafted regarding inflation, as Democrats hope to maintain majorities in the Senate and House ahead of the 2022 midterm elections. 

Indeed, a Wall Street Journal poll released this week showed 58% of respondents saying inflation was causing them major or minor financial strain, and 63% saying they disapprove of President Biden’s handling of the matter.

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Speaking on the Federal Reserve’s decision today, Psaki appeared to pivot and suggest the Russian invasion of Ukraine was also playing a major role for a record high inflation rate. 

"We continue to believe that the United States economy is positioned well to deal with the challenges ahead, even as we continue to monitor. Obviously there are events that impact the economy, including an invasion of a foreign country, and we're seeing that impact as well play out in the economic data," Psaki remarked. 

All of President Biden's Federal Reserve Board nominees, including Chair Powell and Vice Chair Lael Brainard, were advanced to the full Senate on Wednesday evening after a vote before the Senate Banking Committee. 

This only came after Sarah Bloom Raskin's Tuesday's decision to withdraw her nomination in the wake of Sen. Joe Manchin, D-WV., announcing his opposition to her candidacy this week, allowing the rest of the candidates to advance.