Treasury Secretary Janet Yellen promised to bring down near-record high inflation, but offered few solutions beyond passing prescription drug market reform and clean energy initiatives.
"To dampen inflationary pressures without undermining the strength of the labor market an appropriate budgetary stance is needed to complement monetary policy actions by the Federal Reserve," she said. "Moving forward, elements of the president’s proposed legislation – including the clean energy initiatives and plans to reform the prescription drug market – can help lower the costs paid by American consumers.
The White House started taking steps last week to address growing voter unrest over surging inflation by stressing that officials are maximizing efforts to bring prices under control ahead of the November midterms, in which Democrats risk losing their already razor-thin majorities. Biden called tackling inflation his "top priority" during a rare Oval Office meeting last week with Fed Chair, though he also sought to deflect blame over soaring prices, saying that fighting inflation largely falls under the purview of the central bank. The White House has increasingly tried to shift the responsibility for tackling prices to the Fed – as polls show that inflation, which has hovered near a 40-year high for months, is a top concern for voters.
A Labor Department report last month said the consumer price index jumped by 8.3% in April, underscoring that inflationary pressures in the economy remain very strong. On top of that, gas prices hit another record high on Tuesday, with a gallon of gas on average now costing $4.91 — up 40% from just one year ago. Most economists now expect elevated prices to persist throughout the year, worsening the political headache for both Biden and the Fed.
"I think I was wrong then about the path that inflation would take," Yellen said last week during an interview on CNN. "There have been unanticipated and large shocks that have boosted energy and food prices, and supply bottlenecks that have affected our economy badly that I... at the time, didn’t fully understand."
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