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Fed Chair Powell in Jackson Hole: Inflation Fight Isn’t Over

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Jerome H. Powell, the head of the Federal Reserve, struck a resolute tone in a speech at the central bank’s most closely watched conference.Jerome H. Powell kept the door open to future interest rate increases during his speech at the Federal Reserve Bank of Kansas City’s annual Jackson Hole conference in Wyoming.Pete Marovich for The New York TimesJerome H. Powell, the chair of the Federal Reserve, pledged during a closely watched speech that his central bank would stick by its push to stamp out high inflation “until the job is done” and said that officials stood ready to raise interest rates further if needed.Mr. Powell, who was speaking Friday at the Federal Reserve Bank of Kansas City’s annual Jackson Hole conference in Wyoming, said that the Fed would “proceed carefully” as it decided whether to make further policy adjustments after a year and a half in which it had pushed interest rates up sharply.But even as Mr. Powell emphasized that the Fed was trying to balance the risk of doing too much and hurting the economy more than is necessary against the risk of doing too little, he was careful not to take a victory lap around a recent slowing in inflation. His speech hammered home one main point: Officials want to see more progress to convince them that they are truly bringing price increases under control.“The message is the same: It is the Fed’s job to bring inflation down to our 2 percent goal, and we will do so,” Mr. Powell said, comparing his speech to a stern set of remarks he delivered at last year’s Jackson Hole gathering.Central bankers have lifted interest rates to a range of 5.25 to 5.5 percent, up from near-zero as recently as March 2022, in a bid to cool the economy and wrestle inflation lower. They have been keeping the door open to the possibility of one more rate increase, and have been clear that they expect to leave interest rates elevated for some time.Mr. Powell kept that message alive on Friday.“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” he said.But the Fed chair noted that “at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks,” and that officials would “decide whether to tighten further or, instead, to hold the policy rate constant and await further data.”That suggests that central bankers are not determined to raise interest rates at their upcoming meeting in September. Instead, they might wait until later in the year — they have meetings in November and December — before making a decision about whether borrowing costs need to climb further. Striking a patient stance would give officials more time to assess how the moves they have already made are affecting the economy.“I think this does pave the way for a pause at the September meeting, and leaves their options open after,” said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives. “We’re close to the top, we may be there, and they’re going to move carefully.”Mr. Powell made clear that the Fed was not in a rush to raise rates again, but he remained cautious about the risk of further inflation.Price increases have come down notably in recent months, to around 3 percent as measured by the Fed’s preferred gauge. That is still higher than the Fed’s 2 percent inflation goal, though it is down sharply from a 7 percent peak last summer.And there are signs of stubbornness lingering under the surface. After stripping out food and fuel for a look at the underlying trend, the central bank’s preferred inflation gauge is still running at about twice the Fed’s goal.“The process still has a long way to go, even with the more favorable recent readings,” Mr. Powell said. “We can’t yet know the extent to which these lower readings will continue or where underlying inflation will settle over coming quarters.”That is partly because the Fed is trying to assess how much its policy adjustments are really weighing on the economy and, through it, inflation.The Fed’s higher borrowing costs have been cutting into demand for cars and houses by making auto loans and mortgages more expensive, and they are probably discouraging business expansions and cooling the job market.But it is unclear just how severely the Fed’s current policy setting is weighing on the economy. Rates are much higher than the level that most economists think is necessary to keep the economy growing below its potential run rate, but such estimates are subject to error.“There is always uncertainty about the precise level of monetary policy restraint,” Mr. Powell acknowledged Friday.That is particularly relevant in the face of recent economic data, which has been surprisingly strong. Consumers continue to spend and companies continue to hire at a solid clip in the face of the Fed’s onslaught. The resilience has caused some economists to warn that there is a risk that the economy could speed back up, keeping inflation elevated.“We are attentive to signs that the economy may not be cooling as expected,” Mr. Powell said. “Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy.”Still, Mr. Powell also emphasized that the economy could be taking time to react to the policy moves already made, and that conditions are unusual in the wake of the pandemic: For instance, job openings have fallen by an unusual amount without pushing up unemployment.“This uncertainty underscores the need for agile policymaking,” he said.Mr. Powell’s counterpart, Christine Lagarde, who heads the European Central Bank, made a similar point about policy in the euro economy and globally during a separate speech at the Jackson Hole conference — though the uncertainties she emphasized were more long term.She underlined that the economy is changing fundamentally as labor shortages span many markets, technologies like artificial intelligence develop, and countries shift away from fossil fuels and toward green energy. And she said that in a changing world, overreliance on models and past data — or expressing too much confidence — would be a mistake.“There is no pre-existing playbook for the situation we are facing today — and so our task is to draw up a new one,” she said. “Policymaking in an age of shifts and breaks requires an open mind and a willingness to adjust our analytical frameworks in real-time to new developments.”But Ms. Lagarde emphasized that it was critical to remain committed to achieving price stability, at the central bank’s current 2 percent inflation target, even in an uncertain world.Mr. Powell seemed to agree. During his own speech, he shot down a growing round of speculation among economists that the Fed could — or should — raise its inflation goal, which would make it easier to hit.“Two percent is and will remain our inflation target,” he said.And he finished the talk with the same line that he used to conclude his speech at last year’s Jackson Hole gathering, which was roundly seen as an aggressive stance against inflation.“We will keep at it until the job is done,” he said.Eshe Nelson contributed reporting. More

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    Biden Praises Debt-Ceiling Deal in Address to the Nation

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    President Biden hailed a rare example of bipartisan cooperation in Washington on Friday, saying in his first prime-time address from the Oval Office that this week’s legislative budget deal averts economic calamity from a default on the nation’s debt.The legislation, known as the Fiscal Responsibility Act, passed the Senate late Thursday after receiving broad support in the House earlier in the week. The bill suspends the debt ceiling for two years and cuts back on spending.Seated behind the Resolute Desk, Mr. Biden said he would soon sign the measure into law and sought to reassure Americans that robust job growth — the economy added 339,000 jobs in May alone — would not be sidetracked by global fears about whether the United States is willing to pay its bills.“Essential to all the progress we’ve made in the last few years is keeping full faith and credit of the United States,” Mr. Biden said, adding: “Passing this budget agreement was critical. The stakes could not have been higher.”The speech was designed to double down on Mr. Biden’s longtime brand as a political deal-maker who is able to reach compromise with his rivals. His advisers believe that reputation is critical to his ability to win a second term in the White House.But Mr. Biden also used his remarks, which lasted about 12 minutes, to highlight achievements by his administration that are fiercely opposed by Republicans, and vowed to continue pushing a Democratic agenda that includes higher taxes on the wealthy, more spending on climate change and veterans and no cuts to health care or the social safety net.“No one got everything they wanted, but the American people got what they needed,” he said. He added that “we protected important priorities from Social Security to Medicare to Medicaid to veterans to our transformational investments in infrastructure and clean energy.”Mr. Biden went out of his way to praise House Speaker Kevin McCarthy, his chief Republican rival.“He and I, we and our teams, we were able to get along, get things done,” Mr. Biden said. “We were straightforward with one another, completely honest with one another and respectful with one another. Both sides operated in good faith.”The president said he would sign the bill on Saturday, two days before the so-called X-date, when the Treasury secretary said the government would run out of cash to pay its bills, a situation that economists have predicted would cause global uncertainty and turmoil.Presidents often reserve the Oval Office for addresses to the nation about war, economic crises or natural disasters. President Ronald Reagan delivered somber remarks from there after the space shuttle Challenger exploded in 1986. President Donald J. Trump announced pandemic restrictions from the Oval Office in early 2020.Mr. Biden’s decision to use the same venue on Friday underscores how close he believes the nation veered toward economic disaster.Mr. Biden and lawmakers had expressed optimism for weeks that they would reach an accord to avoid that outcome, but the deep disagreements between Democrats and Republicans kept the country — and the rest of the world — on edge until the votes were cast in both chambers.In the House, conservative Republicans initially revolted against Mr. McCarthy for failing to win more spending concessions from the president. Several threatened Mr. McCarthy’s speakership, but backed down amid robust support for the speaker from other Republicans.Some Democrats in the House and Senate also resisted the compromise, but the White House made the decision to largely keep quiet as the votes proceeded this week, hoping to avoid inflaming the conservative opposition and making Mr. McCarthy’s job harder.Mr. Biden has said on several occasions that he hoped to find a way to avoid a similar crisis over the debt ceiling in the future and has mentioned the 14th Amendment to the Constitution, which says the debt of the United States “shall not be questioned.”Some legal experts believe that a president could use that passage to ignore the statutory debt limit, thereby avoiding the regular clashes between the parties. Mr. Biden said last month that he hoped to “find a rationale to take it to the courts to see whether or not the 14th Amendment is, in fact, something that would be able to stop it.”On Sunday, he said, “That’s another day.”Before the Oval Office speech, Mr. Biden was faced with anger among some progressives in his party that he had agreed to too many Republican demands during the negotiations.Some Democratic lawmakers voted against the debt ceiling legislation because of new work requirements that it imposes on some recipients of food assistance. White House officials have argued that the legislation removes work requirements for others, including the homeless and veterans.The president also angered some environmentalists by agreeing to approve construction of a natural gas pipeline through West Virginia and Virginia. Critics say the 300-mile Mountain Valley Pipeline will hurt wildlife and the environment as it cuts across the Appalachian Trail.For Mr. Biden, the debt ceiling deal helps to avoid undercutting the strong economy, which is a key selling point for his campaign.But his political advisers also have to be concerned about maintaining support from the coalition of voters who put him in office in 2020, some of whom have been disappointed with his achievements in climate, criminal justice and other areas. More

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    Biden Woos Republican Moderates in Debt Ceiling Standoff

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    A day after an unproductive meeting on the debt limit with Speaker McCarthy, the president assailed “extreme” Republicans who he said had “taken control of the House.”President Biden sought to drive a wedge among Republicans in their escalating dispute over spending and debt on Wednesday, effectively reaching out to moderates in hopes of convincing them to break away from Speaker Kevin McCarthy rather than risk triggering a national default that could throw the economy into a tailspin.Appearing in a competitive suburb with a vulnerable House Republican in his sights, Mr. Biden accused Mr. McCarthy of pursuing a radical strategy at the behest of the “extreme” wing of his party loyal to former President Donald J. Trump, putting the country in economic jeopardy in a way that he said reasonable Republicans of his own era in the Senate would not have done.“They’ve taken control of the House,” Mr. Biden said of this wing to a friendly audience at SUNY Westchester Community College in New York’s Hudson Valley. “They have a speaker who has his job because he yielded to the, quote, MAGA element of the party,” he added.Those hard-right Republicans, Mr. Biden said, are “literally, not figuratively, holding the economy hostage by threatening to default on our nation’s debt, debt we’ve already incurred, we’ve already incurred over the last couple hundred years, unless we give into their threats and demands.”The trip seemed aimed at least in part at peeling off even a few House Republicans to force the speaker’s hand. Legislation that Mr. McCarthy pushed through the House last month linking an increase in the debt ceiling to significant spending restraints passed with just one vote to spare, so even a relatively small mutiny would complicate Mr. McCarthy’s position.Mr. Biden singled out Representative Mike Lawler, a local Republican congressman sitting in the front row in the audience on Wednesday, praising him as a more rational member of his party. “Mike’s on the other team,” Mr. Biden said, “but you know what? Mike is the kind of guy that when I was in the Congress, there was a kind of Republican I was used to dealing with. He’s not one of these MAGA Republicans.”Gov. Kathy Hochul of New York, a fellow Democrat, greeted Mr. Biden in Westchester. The trip seemed aimed at least in part at peeling off even a few House Republicans to force Speaker Kevin McCarthy’s hand. Sarah Silbiger for The New York TimesThe president’s trip came a day after he hosted Mr. McCarthy and other congressional leaders at the White House to discuss the crisis. The session produced no breakthroughs, but the leaders agreed to have their staffs meet every day and to reconvene themselves on Friday.The federal government has reached the $31.4 trillion debt ceiling set by law and the Treasury Department estimates that it will run out of ways to avoid default as soon as June 1. Unless Congress acts by then, the nation will fail to pay its obligations for the first time in history, with potentially devastating consequences for an already fragile economy. Mr. McCarthy insists that any debt ceiling increase be tied to spending cuts, while Mr. Biden rejects linking the two; he has agreed to negotiate deficit controls separately.The annual deficit reached $1.375 trillion last year, up from $983 billion in 2019, the last year before the Covid-19 pandemic prompted vast relief spending, and is projected to double in the next decade. Even aside from the linkage with the debt ceiling, the two sides are drastically apart on how to address the red ink. Mr. Biden has proposed a budget that would reduce projected deficits by nearly $3 trillion over 10 years by increasing taxes on corporations and the wealthy, while Mr. McCarthy’s plan would scale back deficits by $4.8 trillion over a decade largely through cuts in discretionary programs.In speaking to a swing-voting New York suburb, Mr. Biden seemed to have two audiences — voters outside the capital who may not be paying as much attention to the debate and Mr. Lawler. A 36-year-old former political operative and first-term Republican, Mr. Lawler is an obvious target for the White House to try to sway. He ousted Representative Sean Patrick Maloney, then the chairman of House Democrats’ campaign operation, in a district that Mr. Biden won by 10 percentage points.In Washington, Mr. Lawler has positioned himself as a serious-minded moderate, breaking with his party on some cultural issues while supporting Mr. McCarthy’s debt ceiling and spending proposal. Both parties view him as one of the most vulnerable Republicans in 2024, and Democrats are already lining up millions of dollars and potential candidates to defeat him.For now, Mr. Lawler appears to be toeing a careful line between his party’s leaders and the president. When the White House reached out with an invitation to the event that many in the G.O.P. would have shunned, he promptly accepted. In media interviews before and after the speech, Mr. Lawler reiterated he would not support a default. But he also chastised Mr. Biden for not engaging with Mr. McCarthy sooner and insisted on broad spending cuts.Mr. Biden seemed to have two audiences: swing voters and Representative Mike Lawler, a first-term Republican, shown at left.Sarah Silbiger for The New York TimesAt this community college just a few hundred feet from his congressional district border, Mr. Lawler nodded politely when the president mentioned him while onstage on Wednesday. “I don’t want to get him in trouble by saying anything nice about him — or negative about him,” Mr. Biden said jokingly. “But thanks for coming, Mike. Thanks for being here. It’s the way we used to do it.”Speaking with reporters after the speech, Mr. Lawler said that he and Mr. Biden had a “very cordial” and “very frank” conversation backstage before the event. “He told me he wants me to know he wasn’t coming here to put pressure on me in any way,” said Mr. Lawler, who seemed to welcome the president’s remarks onstage about him not being a MAGA Republican. “You heard his comments today. I don’t think he put too much pressure on me.”Mr. Lawler reaffirmed his vote for Mr. McCarthy’s legislation. “We need to get our fiscal house in order,” he said. “And so yes, spending needs to be tied to the debt ceiling. And that is the message I conveyed to the president.” But he repeatedly called for a bipartisan solution.Local Democrats were frustrated that the president wooed Mr. Lawler rather than assail him. Mondaire Jones, a former congressman positioning himself to challenge Mr. Lawler next year, said after the speech that Mr. Lawler had done nothing to justify being described “as not being a MAGA Republican.” Mr. Jones added: “He has voted for everything Kevin McCarthy has asked him to vote for at the request of the MAGA extremists.”Indeed, Republicans seized on Mr. Biden’s comments to rebut the Democratic Congressional Campaign Committee’s attacks on the G.O.P. congressman. “Despite the D.C.C.C.’s repeated lies regarding Congressman Lawler’s positions,” the National Republican Congressional Committee said in a statement, “Lawler is a pragmatic member of Congress who is working to negotiate and avoid a government default.” More

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    Why the Federal Reserve Won’t Commit

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    Facing huge economic uncertainty, the Fed is keeping its options open. Jerome H. Powell, its chair, will most likely continue that approach on Tuesday.Mark Carney, the former Bank of England governor, was once labeled the United Kingdom’s “unreliable boyfriend” because his institution had left markets confused about its intentions. Jerome H. Powell’s Federal Reserve circa 2023 could be accused of a related rap: fear of commitment.Mr. Powell’s Fed is in the process of raising interest rates to slow the economy and bring rapid inflation under control, and investors and households alike are trying to guess what the central bank will do in the months ahead, during a confusing economic moment. Growth, which was moderating, has recently shown signs of strength.Mr. Powell and his colleagues have been fuzzy about how they will respond. They have shown little appetite for speeding up rate increases again but have not fully ruled out the possibility of doing so. They have avoided laying out clear criteria for when the Fed will know it has raised interest rates to a sufficiently high level. And while they say rates will need to stay elevated for some time, they have been ambiguous about what factors will tell them how long is long enough.As with anyone who’s reluctant to define the relationship, there is a method to the Fed’s wily ways. At a vastly uncertain moment in the American economy, central bankers want to keep their options open.Strong consumer spending and inflation data have surprised economists.Hiroko Masuike/The New York TimesFed officials got burned in 2021. They communicated firm plans to leave interest rates low to bolster the economy for a long time, only to have the world change with the onset of rapid and wholly unexpected inflation. Policymakers couldn’t rapidly reverse course without causing upheaval — breakups take time, in monetary policy as in life. Thanks to the delay, the Fed spent 2022 racing to catch up with its new reality.This year, policymakers are retaining room to maneuver. That has become especially important in recent weeks, as strong consumer spending and inflation data have surprised economists and created a big, unanswered question: Is the pickup a blip being caused by unusually mild winter weather that has encouraged activities like shopping and construction, or is the economy reaccelerating in a way that will force the Fed to react?Mr. Powell will have a chance to explain how the central bank is thinking about the latest data, and how it might respond, when he testifies on Tuesday before the Senate Banking Committee and on Wednesday before the House Financial Services Committee. But while he will most likely face questions on the speed and scope of the Fed’s future policy changes, economists think he is unlikely to clearly commit to any one path.“The Fed is very much in data-dependent mode,” said Subadra Rajappa, the head of U.S. rates strategy at Société Générale. “We really don’t have a lot of clarity on the inflation dynamics.”Data dependence is a common central bank practice at fraught economic moments: Officials move carefully on a meeting-by-meeting basis to avoid making a mistake, like raising rates by more than is necessary and precipitating a painful recession. It’s the approach the Bank of England was embracing in 2014 when a member of Parliament likened it to a fickle date, “one day hot, one day cold.”Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Job Growth Is a Boost for Biden as He Bets on a Lasting Turnaround

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    PHILADELPHIA — President Biden on Friday seized on what he called “strikingly good news” about the economy, hailing the addition of a half-million jobs and capping a week of presidential swagger about the direction of the country.Just days before he delivers his second assessment of the State of the Union in an address before Congress next week, Mr. Biden has all but dropped the “I feel your pain” message he frequently delivered last year as inflation soared.Instead, Mr. Biden traveled around the country this week, pointing to the real-world impact of legislation he championed to spend billions of dollars on the nation’s crumbling infrastructure and unabashedly taking credit for what he is betting will be a lasting turnaround as the Covid-19 pandemic wanes.In Philadelphia, Mr. Biden boasted about the new bridges that will be built and rusty lead pipes that will be replaced because of his efforts. And he praised the country’s businesses for creating 12 million jobs since he took office.“There’s now 12 million more Americans who can look at their kid and say: ‘It’s going to be OK,’” he told a group of workers at a water treatment plant. “And what it’s done mostly is to provide dignity for those families.”But looking on the bright side has its risks, especially since the red-hot job growth in January has the potential to trigger more aggressive interest rate hikes from the Federal Reserve as it tries to keep a lid on high inflation. Prices have still risen at a rate of 6.5 percent, down from last year but well above the average for the last several decades.And economic uncertainty is far from gone as Republicans threaten not to raise the debt limit later this year, a move that economists say would shatter global financial confidence and plunge the nation into recession.The Biden PresidencyHere’s where the president stands as the third year of his term begins.State of the Union: President Biden will deliver his second State of the Union speech on Feb. 7, at a time when he faces an aggressive House controlled by Republicans and a special counsel investigation into the possible mishandling of classified information.Chief of Staff: Mr. Biden named Jeffrey D. Zients, his former coronavirus response coordinator, as his next chief of staff. Mr. Zients replaces Ron Klain, who has run the White House since the president took office.Economic Aide Steps Down: Brian Deese, who played a pivotal role in negotiating economic legislation Mr. Biden signed in his first two years in office, is leaving his position as the president’s top economic adviser.Eyeing 2024: Mr. Biden has been assailing House Republicans over their tax and spending plans, including potential changes to Social Security and Medicare, as he ramps up for what is likely to be a run for re-election.Previous presidents who have been too rosy about the economy have been punished by voters who see them as out-of-touch with their real-life issues. President George Bush lost his re-election bid in 1992 after seeming to dismiss the impact of an inflation-driven recession on middle-class workers.“This is the hardest thing to do in politics,” said James Carville, the Democratic strategist who helped Bill Clinton defeat Mr. Bush that year. “In a recovery, when can you say there’s a recovery and things are good? When people don’t think it’s good and you say it’s good, they get angry with you.”That same dynamic hurt Mr. Clinton politically in 1994, Mr. Carville recalled.“Although the economy was doing better, if we said it, the blowback was: ‘The guy is out of touch,’” he said. “That’s the most difficult and vexing problem that any incumbent has.”The White House has also been anxious over a worker shortage as Mr. Biden focuses on the implementation of his infrastructure, economic and climate legislation this year to galvanize voters. The labor market has remained tight; data released this week showed that the number of posted jobs per available unemployed worker rose again in December.But Mr. Biden and his team appear to have decided that it is not a time to hold back.The United States added 517,000 jobs in January alone, the Labor Department said on Friday, and the unemployment rate fell to 3.4 percent, the lowest rate of joblessness since before the first moon landing in the summer of 1969.The 12 million jobs added since Mr. Biden took office amount to “the strongest two years of job growth in history — by a long shot,” Mr. Biden crowed in remarks at the White House, adding that the new jobs report proves that a “chorus of critics” were just plain wrong about his approach to the economy..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Those critics often note that the dramatic job growth during Mr. Biden’s term is the result of needed rebuilding after the loss of about 10 million jobs in the country because of pandemic-related shutdowns.Just moments after Friday’s jobs report came out, members of Mr. Biden’s team took to social media. Shalanda Young, the president’s budget director, noted the unemployment rate, saying “@POTUS’s economic plan is delivering.” Ian Sams, the spokesman for the White House Counsel’s Office, criticized Republicans for “political stunt” investigations.“House Rs could instead join @POTUS to focus on issues affecting people’s lives like jobs & work together on this historic progress,” he wrote alongside a chart showing the decline in the unemployment rate since Mr. Biden took office.The president and his team are unlikely to get that kind of cooperation from his adversaries, especially after an announcement on his likely re-election bid, a move expected in the coming weeks or months.Despite his administration’s accomplishments, Mr. Biden remains in a politically perilous situation with voters after two years in office. A recent public opinion survey by NBC News indicated that a plurality of voters do not think he is “honest and trustworthy,” has the “ability to handle a crisis,” is “competent and effective,” or is “uniting the country.”In the survey, 54 percent said Mr. Biden does not have the “necessary mental and physical health to be president.” Only 28 percent said he does.Still, the president’s aides are betting that voters will be more focused on how they experience the economy: Do they have jobs? Can they afford to buy groceries and gas? Do they have the resources to take a vacation or buy a car?A year ago, with gas prices soaring, Mr. Biden went out of his way to make sure Americans knew he felt their financial frustration with the situation, saying “I get it,” and adding: “I know how much it hurts.”On Friday, that sentiment was largely replaced by an unrestrained enthusiasm in the wake of one of the biggest employment increases in months.Mr. Biden has for months pointed to job growth as evidence that his agenda has rebuilt the economy after the coronavirus pandemic shuttered much of the United States. On Friday, he amplified that narrative to draw a contrast between what he says are policies that produced steady growth and the tax and spending plans of some House Republicans.Throughout his time in office, rising consumer prices have been one of the more glaring political vulnerabilities for Mr. Biden. The Fed on Wednesday raised interest rates for an eighth consecutive time in a year in an effort to cool rapid inflation.Republicans have accused the White House of worsening inflation by injecting too much money into the economy and have called for major spending cuts.Asked after his remarks whether he takes responsibility for inflation that remains high, Mr. Biden said he does not.“Because it was already there,” he said. “When I got here, man. Remember what the economy was like? Jobs were hemorrhaging. Inflation was rising? We weren’t manufacturing a damn thing here. We were in real economic difficulty.”“That’s why I don’t,” he said. More

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    Powell Says Fed Will Not Be a ‘Climate Policymaker’

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    In a speech on Federal Reserve independence, Chair Jerome H. Powell emphasized that climate change should be addressed by elected officials.Jerome H. Powell, the Federal Reserve chair, said that to retain its independence from politics, the central bank must “stick to its knitting” — and that means it is not the right institution to delve into issues like mitigating climate change.“Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals,” said Mr. Powell, who delivered his comments at a conference held by Sweden’s central bank. “We are not, and will not be, a ‘climate policymaker.’”Mr. Powell’s comments responded to occasional calls from Democrats for the Fed to take a more active role in policing climate change, and to skepticism from some Republicans that it can guard against climate-related risks to the financial system without overstepping and actively influencing whether industries like oil and gas can access credit.While the central bank is working on ways to better monitor climate-related risks at financial institutions, officials including Mr. Powell have been clear that they should not try to incentivize banks to lend to green projects or discourage them from lending to carbon-producing ones.“Addressing climate change seems likely to require policies that would have significant distributional and other effects on companies, industries, regions, and nations,” Mr. Powell said in his remarks.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Biden to Announce Expansion of Port of Los Angeles's Hours

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    The expansion of the Port of Los Angeles’s hours comes as the administration has struggled to untangle kinks in global supply chains and curb the resulting inflation.WASHINGTON — President Biden will announce on Wednesday that the Port of Los Angeles will begin operating around the clock as his administration struggles to relieve growing backlogs in the global supply chains that deliver critical goods to the United States.Product shortages have frustrated American consumers and businesses and contributed to rising prices that are hurting the president politically. And the problems appear poised to worsen, enduring into late next year or beyond and disrupting shipments of necessities like medications, as well as holiday purchases.Mr. Biden is set to give a speech on Wednesday addressing the problems in ports, factories and shipping lanes that have helped produce shortages, long delivery times and rapid price increases for food, televisions, automobiles and much more. The resulting inflation has chilled consumer confidence and weighed on Mr. Biden’s approval ratings. The Labor Department is set to release a new reading of monthly inflation on Wednesday morning.Administration officials say that they have brokered a deal to move the Port of Los Angeles toward 24/7 operations, joining Long Beach, which is already operating around the clock, and that they are encouraging states to accelerate the licensing of more truck drivers. UPS, Walmart and FedEx will also announce they are moving to work more off-peak hours.Mr. Biden’s team, including a supply chain task force he established earlier this year, is working to make tangible progress toward unblocking the flow of goods and helping the retail industry return to a prepandemic normal. On Wednesday, the White House will host leaders from the Port of Los Angeles, the Port of Long Beach, and the International Longshore and Warehouse Union to discuss the difficulties at ports, as well as hold a round table with executives from Walmart, UPS and Home Depot.But it is unclear how much the White House’s efforts can realistically help. The blockages stretch up and down supply chains, from foreign harbors to American rail yards and warehouses. Companies are exacerbating the situation by rushing to obtain products and bidding up their own prices. Analysts say some of these issues may last into late next year or even 2023.Administration officials acknowledged on Tuesday in a call with reporters that the $1.9 trillion economic aid package Mr. Biden signed into law in March had contributed to supply chain issues by boosting demand for goods, but said the law was the reason the U.S. recovery has outpaced those of other nations this year.Consumer demand for exercise bikes, laptops, toys, patio furniture and other goods is booming, fueled by big savings amassed over the course of the pandemic.Imports for the fourth quarter are on pace to be 4.7 percent higher than in the same period last year, which was also a record-breaking holiday season, according to Panjiva, the supply chain research unit of S&P Global Market Intelligence.Meanwhile, the pandemic has shut down factories and slowed production around the world. Port closures, shortages of shipping containers and truck drivers, and pileups in rail and ship yards have led to long transit times and unpredictable deliveries for a wide range of products — problems that have only worsened as the holiday season approaches.Home Depot, Costco and Walmart have taken to chartering their own ships to move products across the Pacific Ocean. On Tuesday, 27 container ships were anchored in the Port of Los Angeles waiting to unload their containers, and the average anchorage time had stretched to more than 11 days.Jennifer McKeown, the head of the Global Economics Service at Capital Economics, said that worsening supplier delivery times and conditions at ports suggested that product shortages would persist into mid- to late next year.“Unfortunately, it does look like things are likely to get worse before they get better,” she said.Ms. McKeown said governments around the world could help to smooth some shortages and dampen some price increases, for example by encouraging workers to move into industries with labor shortages, like trucking.President Biden is set to give a speech on Wednesday addressing the problems in ports, factories and shipping lanes that have helped create shortages.Stefani Reynolds for The New York Times“But to some extent, they need to let markets do their work,” she said.Phil Levy, the chief economist at the logistics firm Flexport and a former official in the George W. Bush administration, said a Transportation Department official gathering information on what the administration could do to address the supply chain shortages had contacted his company. Flexport offered the administration suggestions on changing certain regulations and procedures to ease the blockages, but warned that the problem was a series of choke points “stacked one on top of the other.”“Are there things that can be done at the margin? Yes, and the administration has at least been asking about this,” Mr. Levy said. However, he cautioned, “from the whole big picture, the supply capacity is really hard to change in a noteworthy way.”The shortages have come as a shock for many American shoppers, who are used to buying a wide range of global goods with a single click, and seeing that same product on their doorstep within hours or days.The political risk for the administration is that shortfalls, mostly a nuisance so far, turn into something more existential. Diapers are already in short supply. As aluminum shortages develop, packaging pharmaceuticals could become a problem, said Robert B. Handfield, a professor of supply chain management at North Carolina State University.And even if critical shortages can be averted, slow deliveries could make for slim pickings this Christmas and Hanukkah.“I think Johnny is going to get a back-order slip in his stocking this year,” Dr. Handfield said. Discontent is only fueled by the higher prices the shortages are causing. Consumer price inflation probably climbed by 5.3 percent in the year through September, data from the Bureau of Labor Statistics is expected to show on Wednesday. Before the pandemic, that inflation gauge had been oscillating around 2 percent.Officials at the White House and the Federal Reserve, which has primary responsibility for price stability, have repeatedly said that they expect the rapid price increases to fade. They often point out that much of the surge has been spurred by a jump in car prices, caused by a lack of computer chips that delayed vehicle production.But with supply chains in disarray, it is possible that some new one-off could materialize. Companies that had been trying to avoid passing on higher costs to customers may find that they need to as higher costs become longer lived.Others have been raising prices already. Tesla, for instance, had been hoping to reduce the cost of its electric vehicles and has struggled to do that amid the bottlenecks.“We are seeing significant cost pressure in our supply chain,” Elon Musk, the company’s chief executive, said during an annual shareholder meeting Oct. 7. “So we’ve had to increase vehicle prices, at least temporarily, but we do hope to actually reduce the prices over time and make them more affordable.”For policymakers at the White House and the Fed, the concern is that today’s climbing prices could prompt consumers to expect rapid inflation to last. If people believe that their lifestyles will cost more, they may demand higher wages — and as employers lift pay, they may charge more to cover the cost.What happens next could hinge on when — and how — supply chain disruptions are resolved. If demand slumps as households spend away government stimulus checks and other savings they stockpiled during the pandemic downturn, that could leave purveyors of couches and lawn furniture with fewer production backlogs and less pricing power down the road.If buying stays strong, and shipping remains problematic, inflation could become more entrenched.Some of the factors leading to supply chain disruptions are temporary, including shutdowns in Asian factories and severe weather that has led to energy shortages. Consumer habits, including spending on travel and entertainment, are expected to slowly return to normal as the pandemic subsides.But most companies have enormous backlogs of orders to work through. And company inventories, which provide a kind of insulation from future shocks to the supply chain, are extremely low.To get their own orders fulfilled, companies have placed bigger orders and offered to pay higher prices. The prospect of inflation has further encouraged companies to lock in large purchases of products or machinery in advance.“The customers that are willing to pay the most are most likely to get those orders filled,” said Eric Oak, an analyst at Panjiva. “It’s a vicious cycle.”Emily Cochrane More