Biden on a strong dollar: It’s not our fault, rest of the world has bad economic policies

President Joe Biden dismissed the risks of a strong U.S. dollar and instead blamed volatile growth and policy mistakes in other parts of the world for dragging down the global economy. bridge goes down.

“I don’t care about the strength of the dollar, I worry about the rest of the world,” Biden told reporters Saturday during a campaign stop in Portland, Oregon. “Our economy is as strong as hell.”

Biden’s comments contrast with top leaders from other countries, who have increasingly expressed concern about how the rising greenback is fueling inflation in their economies. The dollar has rallied about 15% this year as the Federal Reserve embarked on an aggressive campaign to raise interest rates to stem a US rally.

The impact of a rising dollar is a main topic between delegates at the International Monetary Fund and the World Bank, the organization concluded their fall meeting on Saturday in Washington. Fed officials have heard continued concerns from other countries about how the greenback’s appreciation has raised the cost of their imports and fueled inflation, triggering a policy tightening cycle. surname.

But with the Fed continuing to raise borrowing costs through the end of the year, Biden sought to allay reasons for the slowing global economy. On Saturday, he criticized British Prime Minister Liz Truss’ tax cut plan for causing turmoil in markets, calling it a “mistake”.

“Predictable. I mean, I’m not the only one who thinks it was a mistake,” Biden said in Portland. “I think the idea of ​​tax cuts for the super-rich at a time – anyway, I just think – I don’t agree with this policy,” he added.

Truss’ policies, including controversial tax cuts for the wealthy that she has reversed since reversing, caused the pound’s plunge and forced the Bank of England to intervene. cards to support gilts. The turmoil that has spilled over into global markets, as traders wary of stronger volatility seek refuge in the havens, continues to boost the dollar.

But beyond the UK, a strong dollar continues to weigh on the global economy, especially poorer nations that rely on food imports. The destructive combination of a soaring greenback, high interest rates and soaring commodity prices is eroding their ability to pay for commodities typically priced in the dollar and fueling the crisis. The global food crisis is getting worse.

Biden’s remarks contrast with his predecessor’s. During his administration, Donald Trump has claw at the Fed, saying he doesn’t want a strong dollar to hinder trade with other countries. Prior to that, previous US presidents in recent decades often refrained from commenting on currencies.

In the face of growing global complaints about the US currency, Treasury Secretary Janet Yellen told an international audience during meetings in Washington this week that fighting inflation is the administration’s top priority. , even acknowledging “the spillover effects from tightening monetary policy in advanced countries”.

She reiterated that “the market-determined exchange rate is the best regime for the dollar.”

Biden’s latest message contrasts with his comment in an interview with CNN on Tuesday that allowed the possibility of a U.S. recession, though he said: “If that’s the case, it would be a very mild recession.”

On Saturday, he reiterated the administration’s insistence that inflation is “worldwide”.

“The problem is the lack of economic growth and sound policy in other countries,” Biden said.

– With the support of Saleha Mohsin

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