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00:00So a tapping of the SPRO and encouraging OPEC plus to pump more oil shale players to pump more oil as well. This action on alcohol ethanol is the administration reaching the limit of what it is able to do to rein in inflation. Well everything is on the table. And I'm glad you brought up the ethanol 15 announcement coming later today. This is something that according to I think pretty widespread analysis could reduce the price at the pump and stations could sell 15 by about 10 cents a gallon. We also know that upon the release of the sparrow barrels strategic reserve barrels that's the price of oil has come down about 10 percent. And we've seen about an 11 cent per gallon decline in retail gas prices at the pump. Now I want to be clear this remains a global price as same with food. These are global commodities. So I'm not saying that the release or the E 15 announcement are the only factors going on but they're certainly helping to push in the right direction to ease pressures on the American people. Jared history doesn't have a particularly good track record of showing that trying to control prices works. Is the White House trying to control prices here. And what do you think your chances of success. So yeah that's a totally fair question. No we're not trying to control prices. What we're trying to do and you can see this and so many of our different policy agenda items whether it's near medium or long term is to bring up the economy supply to better align with the economy's demand. This inflation that we've been going through is very simply and I think clearly understood as extremely strong demand both in labor and product markets hitting inadequate supply. So whether you're looking at the president's agenda to reduce the costs of prescription drugs to reduce the costs of child or elder care if you're looking at the release from the Sparrow or the 15 announcement today in every case we're doing all that we can to better realign supply and demand. And by the way from my perspective as a macro economist who've been tracking these developments for many more decades than I want to share with you right now one of the key variables here is labor supply. And there we really have seen some quite positive movements that I think have been underreported. In fact the labor force participation rate whether you look at an overall or for prime age workers is growing faster in this expansion than any of the past five expansions. Key variable to help hasten that realignment. Well when we're talking about the realignment of supply and demand the administration has time and again pointed to the Federal Reserve and its role in reining in demand through the mechanism of interest rate hikes with the mechanism of quantitative tightening. Is the administration happy to see potentially a higher unemployment rate potentially slower growth if not an outright recession if it does indeed bring down inflation pressure and higher prices that the American people are facing. I mean we've been touting just how low the unemployment rate is and how at three point six percent were a tick above where we were pre pandemic and how quickly we've gotten here thanks in part to the American rescue plan which by putting checks in pockets and charts and arms has helped us get to this very tight labor market. So that's something that we consider an absolutely invaluable asset to working Americans. Now if you look at forecasts not just ours take Goldman Sachs. I follow their forecasts pretty closely. They have they've penciled in all the rate hikes and they have the unemployment rate I believe at three point five or three point six at the end of the year. So they're the soft landing scenario is one where in labor demand stays strong unemployment stays low and inflation comes down. Now that is but one of numerous scenarios but that is that is the soft landing scenario. Yeah they've still got inflation pretty elevated at the year ends. Java Sea. Where do you think inflation is going to ultimately settle here with the White House. Be comfortable with an above 2 percent inflation rate. You think the American people would be comfortable with an above 2 percent inflation rate. Great question. So first of all let let us talk. Let's talk about the forecast for a second because you're right. Forecast that used to have inflation ending the year in the 2 to 3 range. Now have inflation to the 3 to 4 4 and a half range in many cases. I think the key perspective from the American people is less what's the actual percentage increase year to year quarter to quarter month to month. And are they getting some easement at the pump in the grocery store when they go out to the restaurants services goods. And every single forecast I've seen does show inflation letting up some towards the end of the year not to the level that we need to see it. And we will not relax. All these price pressures ease in American households don't have to worry about inflation going forward. But the fact that the you know this is just the first urban story it's the second derivative story we have to see. The pace at which inflation is is rising that should be decelerating by the end of the year according to these forecasts. I believe that will be a positive development should it materialize. We can't sit here and hope that that happens. We do everything we can to make sure it happens.

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White House Is Not Trying to Control Prices: CEA’s Bernstein

White House Council of Economic Advisers member Jared Bernstein discusses inflation and steps taken by the Biden administration to help ease price pressures on "Bloomberg Markets." (Source: Bloomberg)

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