White House Economic Advisor: Focus Shifts to Jobs and Growth as Inflation Eases
New York, September 17, 2024 – TheWhite House has declared victory in the fight against inflation, shifting its focus to bolstering job creation and economic growth. Lael Brainard, Director of the NationalEconomic Council, stated that the U.S. has made significant progress in bringing inflation down to near-normal levels and now needs to prioritize maintaining the strong labor marketgains achieved.
Speaking at the Council on Foreign Relations in New York, Brainard highlighted the importance of addressing affordability challenges, particularly in the housing sector. She emphasized that the Federal Reserve’s anticipated interest rate cuts will contribute to lowering mortgagerates, making it easier to develop more housing units and alleviate affordability pressures.
Today, we are at an important inflection point, Brainard said. Inflation is coming down to near-normal levels, and it’s crucial tosafeguard the substantial progress we’ve made in the labor market.
The Biden administration’s current economic strategy prioritizes supporting growth and the job market, but acknowledges the need to provide further assistance to Americans struggling with rising prices and living costs. This includes measures to increase housing supply.
Brainard’s comments comeas the Federal Reserve prepares to announce its latest interest rate decision on Tuesday and Wednesday. While a rate cut is widely anticipated, the extent of the reduction remains uncertain. Some, including Democratic Senators Elizabeth Warren, Sheldon Whitehouse, and Tammy Baldwin, have called for a more aggressive rate cut of 75 basis points thisweek, expressing concern that the Fed might be too cautious in its approach.
In a joint letter to Fed Chair Jerome Powell, the senators urged the central bank to consider a more preemptive rate cut to mitigate potential risks to the labor market. They warned that if the Fed is too hesitant to cut rates, it will unnecessarily risk our economy falling into recession.
The White House’s focus on job creation and economic growth comes amid a backdrop of positive employment figures. The U.S. has seen 11 consecutive quarters of rising employment, with a slight increase in layoffs in the second quarter of 2024. This increase in layoffs is attributed primarily to corporate restructuring.
Despite the positive employment outlook, concerns remain about the potential impact of rising interest rates on the economy. The White House is committed to addressing these concerns and ensuring a sustainable economic recovery.
The Federal Reserve’s decision on interest rates will have significant implications for theU.S. economy. A more aggressive rate cut could provide a boost to growth, but also carries the risk of fueling inflation. A more cautious approach could help to stabilize prices, but might not be enough to stimulate economic activity.
The White House’s shift in focus to jobs and growth reflects a growing confidence in theU.S. economy’s ability to navigate the challenges of inflation and interest rate adjustments. However, the coming months will be crucial in determining the success of this strategy and the long-term health of the U.S. economy.
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