Bidenflation: Fed Chair Powell Debunks Biden’s State of the Union Inflation Claim

Federal Reserve Chair Jerome Powell gently dismissed the idea at the heart of President Joe Biden’s inflation remarks in this week’s State of the Union Address.

Powell was questioned Thursday in a Senate Banking Committee hearing on whether industry concentration, corporation concentration, and a lack of competition were driving inflation higher, a theory of inflation that has been pushed by Sen. Elizabeth Warren (D-Mass.) and formed the core of Biden’s inflation commentary at Tuesday night’s address.

“The connection between concentration and inflation is really not clear,” Powell said. “Some of the industries that had a lot of consolidation were the very ones that drove low inflation over the last 25 years.”

Powell indicated that while there may be instances where a lack of competition in a specific industry gives rise to pricing power, there’s little evidence that this can explain the kind of economy-wide inflation the U.S. is experiencing today.

He also reminded lawmakers that the Federal Reserve is not responsible for competition policy.

Powell had declined to comment on the Biden inflation claims at a hearing of the House Financial Services Committee on Wednesday when he was asked directly about Biden’s speech, saying he did not watch it. On Thursday, he was asked about consolidation’s role in inflation by Senator Jon Tester (D-Mont.) but not directly about Biden’s commenting.