Is Joe Biden’s Bet on Inflation Paying Off?

U.S. presidents tend to not go out and push the Federal Reserve around. Trump did it, of course — there’s hardly a norm or tradition he didn’t break — and he did it in his typical way, calling the Fed’s executives a bunch of “boneheads” for not sending interest rates down below zero. So last week, when Joe Biden appeared to be nudging the Fed, it was a surprise. “I can’t guarantee it, but I bet — you betcha — those rates come down more, because I bet you that that little outfit that sets interest rates, it’s going to come down,” he said, according to Bloomberg. (He was referring to the Fed’s committee that sets the bar for interest rates.) Then again, Biden wasn’t saying anything that was all that controversial. Inflation, the prime reason for higher interest rates, has looked to be on its last legs and far from the raging monster that was wreaking havoc upon the economy in 2022. The Fed’s chair, Jerome Powell, had said rates were probably going to fall. Wall Street was gambling on three rate cuts by the end of the year. And Biden wasn’t calling anybody a dog-faced pony soldier or something. If predicting a rate cut was a gamble for the president, the odds were, as of last week, short.

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