White House economic adviser Cecilia Rouse on Sunday defended the limited progress the Biden administration has had on tamping down inflation, responding to comments from President Joe Biden last week that tried to put a positive spin on the high rate.
“We’re starting to see signs that the actions they are taking is having an effect,” Rouse said of the Federal Reserve, which she said is focused on bringing down inflation.
Rouse pointed to data from last month that employers are posting fewer job openings and the housing market is tapering off during an interview with CNN’s Dana Bash on “State of the Union.”
“So we’re starting to see signs that our red-hot economy is starting to cool. And so we know that because of that strength … we’re better positioned than most other countries for the Fed to achieve its goals,” Rouse said.
Data from the Bureau of Labor Statistics released earlier this week showed that annual inflation rose by 8.2% in September, a slower increase than the 8.3% rise seen in August. Economists had projected that the pace of price increases would slow to 8.1% last month, CNN reported last week. On a monthly basis, overall consumer prices increased by 0.4% from August.
Asked by Bash about the high prices of food Americans are paying, Rouse pointed to the Inflation Reduction Act’s ability to lessen costs for Americans for prescription medicine – though she acknowledged it does nothing for food prices.
But pushed on when it would start lowering inflation, Rouse said, “Many parts of the bill will start to take effect next year.”
Rouse spoke about the energy tax credits in the law as having one of the most immediate tangible impacts in lowering costs.
“There are tax credits for energy to help people weatherize their homes and also bring down other forms of energy costs. So, we are focused on helping to make that transition to clean energy in a way that brings down energy costs for families,” Rouse said.
“This is tough. There’s no question about it. This is a challenge,” she added about bringing down inflation generally.
Meanwhile, Transportation Secretary Pete Buttigieg admitted Sunday that a recession in the next few months was “possible, but not inevitable” and argued that the Biden administration was doing everything it could to “strengthen the foundations of the American economy.”
“It’s been hard for the supply side to keep up, that’s a big part of what we’re working on,” Buttigieg told ABC News.
The secretary’s concession comes less than a week after Biden told CNN that the prospect of a “slight recession” was possible but that he doesn’t anticipate it. Last month, 72% of economists polled by the National Association for Business Economics said they expected the next US recession to begin by the middle of next year – if it hasn’t already started.