On Wednesday’s broadcast of CNN’s “The Lead,” White House Council of Economic Advisers Chair Cecilia Rouse responded to a clip of President Joe Biden predicting that inflation had peaked on December 10, 2021, when Russian troops were already on Ukraine’s border by stating that “The inflation we’re seeing is due to the pandemic and is due to the war.”
Host Jake Tapper stated, “CNN’s Kaitlan Collins asked President Biden about inflation on December 10 — it’s July now — on December 10, and President Biden told her then that he thought December 10 was the peak of the crisis.”
In the clip, Biden stated, “I think you’ll see it change sooner than, quicker than, more rapidly than it will take — than most people think. Every other aspect of the economy is racing ahead. It’s doing incredibly well.”
Tapper then said, “Now, obviously, the war in Ukraine has happened since then, which is partially to blame for higher gas prices, although Putin’s forces were on the border right then. But it just seems clear that the Biden administration has misjudged how bad inflation was going to get, for months and months and months.”
Rouse responded, “So, look, there is no question that the war in Ukraine exacerbated the inflation challenge. In fact, you can go back to when Putin had troops on the border, and since that time, about 90% of the difference between headline CPI and core CPI can be attributed — since, has — that has widened since the war began. The inflation we’re seeing is due to the pandemic and is due to the war. And we’re not done with this pandemic. We’re now seeing that there — China is under threat of lockdown again. While we have made great progress on many aspects of the supply chain, we’re not done with this pandemic. So, the Federal Reserve has the primary responsibility of generating price stability and maximum employment. They are starting to make movements. We’re starting to see that their changes, their policy movements are trying to — are seeping into the economy. We’re seeing nominal wage increases are moderating. We’re seeing a little bit of moderation in consumer spending. And it’s — so, their processes are in motion. We have full faith and confidence that, over the coming months, that inflation will be coming down. I don’t have a crystal ball. I’m not going to tell you exactly when, the timing. The war in Ukraine is a big unknown. But I can tell you this, we came into these challenges with record growth over last year. We still have a labor market that is very strong and household balance sheets, I understand that they are being tapped, but they’re stronger than they have typically been going into this kind of rate hike period. So, yes, we face challenges, but we also come at it from a position of relative strength.”
Follow Ian Hanchett on Twitter @IanHanchett