How Biden Can Use Inflation to His Advantage
The president and his party have a window of opportunity while the economy is growing and interest rates are still low.
Pointing in the direction he wants inflation to go.
Photographer: MANDEL NGAN/AFPThe defining issue of Joe Biden’s presidency is not climate change, geopolitics or even Covid. It is inflation — and while it is an existential threat to his political career, it also presents an opportunity for him and moderate Democrats to fulfill some long-sought policy goals.
The threats from inflation are obvious. After adjusting for rising prices, median weekly earnings are declining at the fastest pace on record. The cost of staples such as gasoline and groceries is up sharply, and the war in Ukraine is only likely to make things worse. Most worrying of all, investors are starting to adjust their long-run expectations of inflation upward, which would make it much harder for the Federal Reserve to fight inflation.