By Jeff Mason, Jarrett Renshaw3 Min Read(Reuters) – U.S. President Joe Biden and Federal Reserve Chair Jerome Powell met on Tuesday to debate historic inflation that’s draining Americans’ pocketbooks.Slideshow ( 2 pictures )The assembly, the primary since Powell’s affirmation for a second time period by the Senate earlier this month, comes as Biden seeks to decrease prices for gasoline, meals and shopper items which have despatched inflation to 40-year highs.In transient remarks forward of the assembly, Biden stated he was assembly with Powell and U.S. Treasury Secretary Janet Yellen to “discuss my top priority, and that is addressing inflation.”Biden stated his plan to take care of inflation “starts with a simple proposition: respect the Fed, respect the Fed’s independence, which I have done and will continue to do.”Stock indexes on Wall Street have been combined because the assembly started round 1:45 p.m. (1745 GMT).The U.S. economic system had its strongest progress in almost 4 many years in 2021, after the federal government poured trillions in COVID-19 aid into the economic system, and the Fed saved borrowing prices close to zero. The rescue efforts helped drive unemployment down to three.6% from its pandemic-era excessive of 15%, but additionally revved up shopper spending that has contributed to greater costs.A Labor Department report earlier this month confirmed unemployment rolls shrinking to the bottom stage in 52 years, serving to to drive wage progress.The Fed hopes inflation will average by itself, as firms kind out provide chain points difficult by the pandemic, for instance, and customers shift spending towards companies.But Powell has additionally made clear that the Fed is now not relying on that, and can ratchet rates of interest as excessive as wanted.He sees excessive inflation because the chief financial threat dealing with the nation, and controlling it because the Fed’s high precedence throughout his second time period, even when the method proves painful to households and corporations, and pushes the unemployment price a bit greater.The Fed has already raised rates of interest by 3/4 of a proportion level this yr. Most Fed policymakers say they anticipate to proceed to boost charges till they attain round 2.5% by the tip of this yr, and additional if wanted. The deliberate price hikes will embody a half proportion level improve at each their June and July conferences.For Biden and the Democratic celebration that would imply a tough midterm election season, the place they’re attempting to take care of management of the Senate and House of Representatives.U.S. shopper value progress slowed in April as gasoline costs eased off document highs, suggesting that inflation has in all probability peaked, although it’s prone to keep sizzling for some time and maintain the Federal Reserve’s foot on the brakes to chill demand.Powell earlier this month stated that regardless of some encouraging indicators that value pressures could also be peaking, the present surroundings is “not a time for tremendously nuanced readings of inflation,” and U.S. central financial institution officers will maintain tightening coverage till inflation comes down in “a convincing way.”Reporting by Jeff Mason and Jarrett Renshaw; Additional reporting by Trevor Hunnicutt; Editing by Alison Williams, Heather Timmons, Mark Porter and Andrea RicciOur Standards: The Thomson Reuters Trust Principles.