White House Council of Economic Advisers member Jared Bernstein insists the Biden administration is doing all it can to “ease inflationary pressures.”
Bernstein told FNC’s “Fox News Sunday” the administration was “engaged in the appropriate policies” given the economic challenges.
“The Fed is expected to hike rates November, December,” host Shannon Bream said. “We’ll see how that far goes on. But the Fed chair has actually said there will be some pain. Those are his words with these hikes. How painful is it going to get?”
“Well, I think you have to distinguish between people who are buying homes now and the vast majority of mortgage holders who locked in rates that are much lower than that,” he said. “You’re definitely right that, you know, at that margin, the price of financing a mortgage, of course, goes up with the interest rate and with the mortgage rate. But again, I think this gets to the question of are we implementing — by we, I mean not just the federal government, but in this case the Federal Reserve as well — are we implementing the necessary policies to ease inflationary pressures?”
“I would say the answer is unequivocally yes,” Bernstein continued. “Now, we’re not going to get into the Feds knitting because we respect an independent Federal Reserve. But the president has very much approved of rate-hiking campaign because they’re the first and foremost inflation fighter. Now, one of the first sectors that experiences the impact of rate hikes is housing, and the housing sector is cooling. Now, that doesn’t find its way into the price index for a while. It comes in with a lag. But if you look at rents, rents have come down significantly.”
“They’re still highly elevated in terms of year-over-year change,” he added. “But they come down four, five percentage points. That’s going to take a while to feed into the CPI, but it is moving in the right direction. And so, that’s what I’m trying to get across here – that whether it’s Inflation Reduction Act, whether it’s our work in ports, whether it is our work with energy and the release of oil from reserves, we are doing all we can to ease inflationary pressures and we see results. It’s going to take time for those results to get into the price. We would like to see that happen a whole lot faster. We’re going to try to work to make that happen. But we are engaged in the appropriate policies.”
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