President Biden addressed the nation’s surging inflation in a key press conference. We’ll also look at Tuesday’s Fed confirmation, Treasury Secretary Janet Yellen’s take on volatile markets and the cryptocurrency crash.
But first, see what Twitter’s co-founder thinks about Elon Musk’s plan to unban former President Trump.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Biden vows to tackle inflation, criticizes GOP
President Biden on Tuesday vowed to tackle surging inflation, calling it his “top domestic priority” and seeking to contrast his economic agenda with that of the Republican Party.
“I know that families all across America are hurting because of inflation,” Biden said in a speech from the White House. “I want every American to know that I am taking inflation very seriously and it’s my top domestic priority.”
Biden discussed at length actions his administration is taking to address high prices, such as efforts to reduce the backlog of goods at America’s ports to boost the nation’s trucking workforce. He also mentioned the historic release from the Strategic Petroleum Reserve meant to ease gas prices. His address was in large part devoted to contrasting his plans with a proposal put forth by Sen. Rick Scott (R-Fla.), who chairs the Senate GOP campaign arm. A controversial proposal Scott put forth earlier this year calls for imposing federal income taxes on Americans who currently pay none and sunsetting all federal legislation after five years, presumably including programs like Social Security and Medicaid, among other ideas. The speech was the latest example of Biden more aggressively criticizing Republicans months out from the midterm elections, as Democrats try to make the election more of a choice rather than a referendum on his first year in office.
Biden’s poll numbers have remained deflated amid widespread frustration with the economy. The White House has struggled to sell good news about the economic recovery as worries about high prices consume Americans.
Biden acknowledged Tuesday in response to a reporter’s question that Americans fault his administration for not doing enough to combat inflation because Democrats are in power, but he noted that the 50-50 split in the Senate has prevented him from enacting some major policy initiatives.
The Hill’s Morgan Chalfant has more on this here.
Lisa Cook confirmed to Fed board as Harris breaks tie
The Senate on Tuesday voted to confirm Michigan State University economics professor Lisa Cook to the Federal Reserve Board along party lines.
Senators voted 50-50 in favor of Cook’s confirmation, with Vice President Harris casting the tie-breaking vote and approving her to be the first Black woman to serve as a governor of the Fed board.
All 50 Senate Democrats voted to confirm Cook, who also served as a member of the White House Council of Economic Advisors during the Obama administration and serves on the executive committee of the American Economic Association. Every GOP senator voted against her.
Democratic lawmakers and liberal policy groups had urged Biden to nominate Cook to the Fed as soon as he clinched the presidential election. Cook’s supporters in Congress and the hundreds of economists who urged for her confirmation—including Former Fed Chairman Ben Bernanke—said her groundbreaking research into the economic effects of racism and deep background in economic history would bring fresh perspectives to the central bank. Republicans, however, said Cook’s limited academic focus on monetary economics and several politically charged posts on Twitter made her unqualified for the Fed board as the bank faced the highest inflation in more than 40 years.
Sylvan has more here.
HEDGE YOUR BETS
Yellen points to hedge funds, unregulated cryptocurrency as sources of instability
Treasury Secretary Janet Yellen took heat from both Republican and Democratic lawmakers Tuesday as she told them that “the inflation outlook still remains quite uncertain.”
Yellen delivered a report to the Senate Banking Committee from the Financial Stability Oversight Council (FSOC), which was set up in the wake of the subprime mortgage crisis to make sure market crashes and government bailouts on that scale would never be needed again.
She argued for greater financial regulation at one of the most precarious economic moments since 2008, pointing specifically to risks posed by over-leveraged investment funds and unregulated cryptocurrency. The hearing came as stocks hit 52-week lows and markets brace for the latest inflation numbers. Yellen testified there is “the potential for continued volatility and unevenness of global growth as countries continue to grapple with the pandemic,” calling attention to the use of borrowed money by hedge funds and other sophisticated investors that “can make them vulnerable to acute financial stresses.”
The Hill’s Tobias Burns has more here.
DOWN BY HALF
Bitcoin value cut in half from its high
The price of the cryptocurrency bitcoin on Monday evening fell to more than half of its price at its November record high, at just $31,075.70, The Wall Street Journal reported, citing CoinDesk prices.
The Monday evening price is a far cry from the record $67,802 that it traded last November; between Sunday evening and Monday alone, the price of bitcoin has dropped 10 percent, according to the outlet.
The last time that bitcoin traded lower than Monday evening was when it was trading at $29,839.80 last July, CNBC noted, using figures from Coin Metrics. The developments come as, for the first time in over two decades, interest rates were raised by 0.5 percent last Wednesday. The Federal Reserve took the measure amid anticipated higher inflation, which has already hit a 40-year high amid supply chain issues and an ongoing international conflict threatening to disrupt chains even further.
Check out more here from The Hill’s Caroline Vakil.
Good to Know
The national average for gas prices hit a new record Tuesday at $4.37, without accounting for inflation, according to AAA data.
The new milestone comes two months after the national average surpassed $4 for the first time in 14 years. Average prices have stayed above $4 since March.
Here’s what else we have our eye on:
Sen. Sheldon Whitehouse (D-R.I.) and Rep. Anna Eshoo (D-Calif.) on Tuesday introduced a bill to limit the volume of advertisements on streaming services. Elon Musk said Tuesday that he will reverse former President Trump’s ban from Twitter if his acquisition of the platform is completed. AP: “Russia pummeled the vital port of Odesa, Ukrainian officials said Tuesday, in an apparent effort to disrupt supply lines and Western weapons shipments critical to Kyiv’s defense.”
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.