Joe Biden takes aim at Jerome Powell’s reluctance to raise interest rates

Former Vice President Joe Biden — and a number of other potential presidential contenders who are huddling in Washington, D.C., for a major conference this week — have spent some time recently criticizing Federal…

Joe Biden takes aim at Jerome Powell’s reluctance to raise interest rates

Former Vice President Joe Biden — and a number of other potential presidential contenders who are huddling in Washington, D.C., for a major conference this week — have spent some time recently criticizing Federal Reserve Chairman Jerome Powell’s approach to monetary policy.

The targets of their ire have varied widely: from Powell’s insistence that interest rates are rising not to trigger a recession but merely to “improve the [potential] employment picture” to warnings about the slow buildup of a global debt bubble that may ultimately lead to a debt-crisis.

It’s an approach that has impressed many centrist economists and those more generally concerned about combating inequality but that has, nonetheless, ruffled some feathers among more liberal figures at the conference. For a bit of perspective, consider former Chicago Fed President Charles Evans, who has helped lead this critique:

“The level of interest rates at which they are positioned right now is close to a historical low. They [the Federal Reserve] say they are doing so to boost spending, which is true. That’s their justification. Their justification for still maintaining a very low-rate environment is also so they don’t in effect enact a program to stimulate the economy.”

As a Democrat, President Barack Obama had largely agreed with his Republican predecessor on financial policy, being more concerned with what was happening to the middle class than with preserving Wall Street’s reputation for, well, misleading public. This stance, perhaps reflecting this impulse as much as the White House’s respect for the Fed as a legal institution, is widely understood to have helped Biden’s candidacy after his run for the nomination in 1988, which collapsed amid disarray at the Democratic convention.

So, how does the veep — one of the more moderate and deferential figures in a party that remains more in tune with the muscular spirit of the Sanders wing — feel about the current state of his party’s politics? Does he think the party should concede the economic center ground to Democrats who would challenge the current purview of the Democratic Party and return power to the nation’s working and middle classes? Or will he instead seek to broker a deal that would let his party fully return to the center and campaign with the assumption that a 2.5 percent annual GDP growth path is a fair return to steady, middle-class prosperity?

His answer may come out at Friday’s New Democrat Coalition confab. Secretary of State Mike Pompeo was previously set to speak, but he canceled his appearance after then-Secretary of State Rex Tillerson called him “a liar,” in an apparent dig at the voluble mercurial President Trump. The conference also includes several potential candidates for the 2020 nomination, including Sen. Kamala Harris, Sen. Amy Klobuchar, and Sen. Elizabeth Warren. Biden could receive as many as 40 or more invitations to speeches and meetings this week, according to people familiar with his schedule.

Read the full story at The Hill.

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