US President Joe Biden said Tuesday that inflation was his “biggest national priority”, recalling that the United States is drawing down its strategic oil stocks to stabilize fuel prices. The United States announced at the end of March that they would draw 1 million barrels a day for 6 months from their strategic reserves, to curb the surge in fuel prices in the United States.
Despite this strong measure, the American president considered that some of the “roots of inflation” were “out of (his) control”, citing the Covid-19 pandemic and the effects of Russia’s war against Ukraine. .
Reflection on the lifting of customs duties imposed on China
He also praised the action of the US Federal Reserve, which plays a “primary role in the fight against inflation in our country”. Last week, the Fed raised its main interest rate by half a point to 0.75%-1% and pledged to continue to raise its rates rapidly in order to curb inflation, which reached 8.5% over one year in March across the Atlantic. The central bank will also begin on June 1 to reduce its huge balance sheet, which is close to 9,000 billion dollars, which will make credit conditions less accommodating.
The American president also recalled that his administration was examining the possibility of lifting the customs duties on Chinese products which had been imposed by his predecessor Donald Trump in 2018, and which represent additional costs for American companies which source from China. In total, the equivalent of 350 billion dollars of annual imports from the Asian giant are affected by these customs duties.
Finally, asked about the duration of inflationary pressure, Joe Biden quoted economists: most expect prices to moderate this year, others believe that it could last until next year. “I can’t predict that,” he said, sounding cautious after long asserting (like the Fed) that high inflation was “temporary.”
The average price per gallon of gasoline up 47% year on year
Inflation figures for April will be published on Wednesday in the United States, China, Germany and France. Across the Atlantic, the consensus expects a slight slowdown in price increases to 8.1% in April over one year after 8.5% in March, the largest increase since 1981. The rate of increase in the CPI ‘ core’, which excludes the most volatile elements, should also slow to 6% year on year after 6.5% in March.
The President’s statement comes as the price of gasoline at the pump hit a new record high in the United States this week, with the average price of a gallon of gasoline (3.78 liters) at $4.374, according to the AAA Automobile Association. The average price of a gallon of gasoline has thus increased by more than 47% over the past year, when it was $2.967.