WASHINGTON — Sen. Joe Manchin said the Federal Reserve needs to “stop pussyfooting around” and “tackle inflation head-on,” renewing his call for the central bank to act against the fastest pace of price increases since the early 1980s.
The West Virginia Democrat has warned for months about the impact of U.S. government spending on inflation. In December, he pulled the plug on negotiations on President Joe Biden’s plan for expanded social programs and tax increases, citing rising prices among his concerns.
He’s a crucial voice in the U.S. Senate, which is split 50-50 between Democrats and Republicans with Vice President Kamala Harris as the tie-breaking vote if all Democrats hold together.
House Speaker Nancy Pelosi said on ABC’s “This Week” on Sunday that accelerating prices should be weighed against rising employment and efforts by President Joe Biden’s to ease the effects of the COVID-19 pandemic with federal spending, including a bipartisan public-works bill enacted last year.
While it’s important to address inflation, it’s “not right to say what we’re doing is contributing to the inflation, because it is exactly the opposite,” Pelosi said.
Fed Chair Jerome Powell, who repeatedly faced pressure from former President Donald Trump to cut interest rates during the previous administration, has sought to keep the U.S. central bank out of politics.
While he has acknowledged being surprised by the strength of price pressures, Powell has signaled that the Fed will start raising interest rates with a quarter-point hike next month.
Financial markets are now betting the Fed will boost its benchmark rate seven times this year, with speculation mounting it will hike by half-a-percentage point in March. It would be the first such outsized hike since 2000.