Federal Reserve chairman Jerome Powell denied the idea that Russian President Vladimir Putin is behind rising inflation in the United States.
This signifies a deep division within the Biden administration, as the president always blames the “Putin price hike” for inflation that recently broke a 40-year record.
Federal Reserve Exposes Biden
During the Senate hearing of Powell, Republican Senator Bill Hagerty reminded the chairman about different contributing factors that are triggering inflation.
Hagerty noted that supply chain disruption, excessive government spending, and increasing demands are contributing a lot to inflation.
The senator also told the chairman that inflation rose from 1.4% in January 2021 to 7% in December 2021, which was before the start of the Russia-Ukraine war.
So, Hagerty asked Powell if he really believed the Russia-Ukraine war is the primary driver of chronic inflation in the United States.
Responding to this, Powell acknowledged inflation remained high even before the start of the war.
GOP Senator BREAKS Fed Chair Jerome Powell, makes him ADMIT Biden has been spreading MASSIVE LIE about inflation pic.twitter.com/tFuUjwsLnP
— Benny Johnson (@bennyjohnson) June 22, 2022
On these remarks, Hagerty appreciated the chairman, adding the Biden administration was falsely blaming external factors for its own economic mismanagement.
These comments of the Fed chairman busted Biden, who kept on using the term “Putin price hike” to eyewash Americans.
Earlier this month, Biden stated everything ranging from high gas prices to food inflation is related to the Russian president’s decision to invade Ukraine.
Democrats Still Don’t Want to Raise Interest Rates
Democratic Senator Krysten Sinema asked Powell about the extent to which the Ukraine war is impacting the prices in the American market.
Although Powell noted the Ukraine crisis drove the prices a bit higher, he accepted most of the hike is still unrelated to the war.
Powell had other bad news for Biden, as well. Amid the increasingly political costs of food and gas inflation, the Federal Reserve decided to raise interest rates significantly.
However, Powell stated the decision to raise the policy rate would not be beneficial in order to control food and oil prices. Instead, the interest rate is only increased to address rising spending issues, Powell claimed.
Sen. Elizabeth Warren asks Fed Chair Jerome Powell if he expects interest rate hikes will bring down gas and grocery prices.
“I wouldn’t say so, no,” Powell said.
— aída chávez (@aidachavez) June 22, 2022
The housing sector will be most vulnerable to the interest rate hike, according to Powell.
He claimed this rise is likely to intensify the suffering of people looking to buy or sell their houses. So, it is “very possible,” Powell continued, that appropriate housing will no longer be available to Americans.
Democratic senators also expressed their concerns about the Fed’s aggressive approach in raising the interest rates.
Senator Elizabeth Warren suggested the increasing rates are likely to urge companies to downsize, which will eventually trigger a recession.
She established the Fed is not adopting the right strategies necessary to reduce inflation, which is a primary concern of Americans nowadays.
Meanwhile, some Republican senators chided the Fed for delaying the interest rate hike for so long. Conservative Senator Thom Tillis noted the interest rate hike was “long overdue” and delayed unnecessarily.