Fed chairman blows up Biden's 'Putin Price Hike' mantra

Joe Biden delivers remarks on the Russian invasion of Ukraine, Thursday, Feb. 24, 2022, in the East Room of the White House. (Official White House photo by Adam Schultz)
Joe Biden delivers remarks on the Russian invasion of Ukraine, Thursday, Feb. 24, 2022, in the East Room of the White House. (Official White House photo by Adam Schultz)

President Biden on Wednesday repeated his insistence that Russian President Vladimir Putin’s invasion of Ukraine is to blame for the highest inflation in four decades.

But Federal Reserve Chairman Jerome Powell went off script Wednesday while answering a question under oath from a U.S. senator.

“Would you say that the war in Ukraine is the primary driver of inflation in America?” asked Sen. Bill Hagerty, R-Tenn.

“No. Inflation was high before; certainly before the war in Ukraine broke out,” Powell replied.

Hagerty, framing his question, said he realized there “are a number of factors that play a role in those historic inflation that we’re experiencing – supply chain disruptions, regulations that constrain supply, we’ve got rising inflation expectations and excessive fiscal spending, but the problem hasn’t sprung out of nowhere.”

But inflation already was rising incrementally by January 2021, when Biden took office, and by December had risen to 7%, Hagerty pointed out. “And since the war in Ukraine began in late February, it has continued to rise incrementally, at the same pace.”

Hagerty’s question was, “Given how inflation has escalated over the past 18 months, would you say that the war in Ukraine is the primary driver of inflation in America?”

The senator said he was glad to hear Powell acknowledge the war was not the driver of inflation.

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“The Biden administration,” Hagerty continued, “seems to be intent on deflecting blame and as recently as just this past Sunday spread the misinformation that Putin’s invasion of Ukraine is the ‘biggest single driver of inflation.’ I’m glad you agree with me that that is not the truth.”

Earlier this month, after inflation in May hit an annual rate of 8.6%, Biden invoked his “Putin’s Price Hike” mantra in a statement.

“Putin’s Price Hike hit hard in May here and around the world: high gas prices at the pump, energy, and food prices accounted for around half of the monthly price increases,” Biden said.

In the Senate hearing Wednesday, Powell acknowledged in response to a question from Sen. Kyrsten Sinema, D-Ariz., that the Ukraine war has influenced fuel and food prices, but he underscored his belief that most of the rise is unrelated.

See Powell’s response to Hagerty:

In an address to the nation Wednesday, Biden again focused on the impact of the Russian invasion while calling on Congress to pass a federal gas tax holiday of three months and on states to also suspend their fuel taxes.

Back in 2008, during the presidential election campaign, Barack Obama called that idea a “gimmick” that “means that we are not tackling the problem that has to be tackled.”

See Obama’s remarks:

Biden press secretary Karine Jean-Pierre tried to explain Wednesday why the president is proposing a suspension of the federal gas tax.

Biden, in his address Wednesday, chastised Republicans who are blaming him for the high gas prices.

“Are you saying that we’d rather have lower gas prices in America than Putin’s iron fist in Europe?”

See Biden’s remarks:

Biden’s Republican critics argue it was measures he began executing on his first day in office to curb or shut down oil production that largely has driven inflation.

He immediately reentered the Paris Climate Accord, canceled the Keystone Pipeline, halted leasing programs in ANWR, and issued a 60-day halt on all new oil and gas leases and drilling permits on federal lands and waters.

Meanwhile, after Biden announced sanctions against Moscow in March – vowing to crush the Russian economy and turn the ruble into “rubble” – the Russian currency came roaring back. The ruble now has become the world’s strongest currency in 2022, increasing 40% in value against the U.S. dollar.

In his address Wednesday, Biden also demanded that gas stations lower their prices.

“To the companies running gas stations and setting those prices at the pump, this is a time of war, global peril, Ukraine,” he said. “”These are not normal times. Bring down the price you are charging at the pump. Do it now.”

See Biden’s remarks on prices at the pump:

Biden economic advisor Gene Sperling told Fox News after Biden’s address: “I just disagree” that gas prices were on the rise before Putin’s invasion.

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Last week, after announcing the Fed was raising its benchmark interest rates thee-quarters of a percentage point – the biggest hike since 1994 – Powell said he wanted to get back to “the labor market we had before the pandemic,” which was under President Trump.

In an op-ed published Wednesday by DailyMail.com, a former CEO and a former senator said that with “inflation surging, it’s little wonder he’s nostalgic for a time when inflation was low, unemployment was at historic lows, labor participation was increasing, and real wages were increasing faster than inflation.”

Unlike most Americans, Powell knows that the official figures dramatically understate the price increases that consumers are facing,” wrote Andy Puzder, a former CEO of CKE Restaurants, and former Missouri senator Jim Talent.

“If inflation were determined using the same methods the government used during the Carter years, it would be well into double digits,” they said, citing citing the website Shadow Government Statistics.

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