Biden Sees Supply Logjams Easing, Oil Release Damping Prices
(Bloomberg) -- President Joe Biden said that bottlenecks in the U.S. supply chain are seeing relief after his administration moved to improve operations at ports -- promising that Americans will have no trouble buying food and gifts in the holiday season that begins this week.
“All of these concerns, a few weeks ago, there would not be ample food for Thanksgiving -- so many people talked about that, understandably,” he said in remarks at the White House on Tuesday. “But families can rest easy. Grocery stores are well stocked with turkey and everything else you need for Thanksgiving.”
He credited his administration’s efforts to speed the movement of ships and containers in and out of U.S. ports, touting public statements from major retailers assuring consumers and shareholders that their shelves will be well stocked.
“I told you we will take action on these problems,” he said. “That’s exactly what we’re doing.”
Biden spoke on the economy after earlier ordering the release of 50 million barrels of oil from the nation’s strategic reserves to try to combat rising gasoline prices. He said it was the “largest-ever release” from the reserves and would “help provide the supply we need as we recover from this pandemic.”
The U.S. release of oil reserves came in coordination with similar, though smaller releases by China, Japan, India, South Korea and the U.K. Biden also recently urged the Federal Trade Commission to probe any anti-consumer behavior by oil and gas companies.
He said that his moves “will not solve the problem of high gas prices overnight but will make a difference.”
“In the longer term, we’ll reduce our reliance on oil as we shift to renewable energy,” he added.
The oil market was underwhelmed by the details of the U.S. release. Much of the oil will have to be returned to the stockpile in the future by refiners who buy it, and international contributions were smaller than some analysts expected.
West Texas Intermediate crude prices rose 2.3% after the announcement while Brent oil, the international benchmark, climbed as much as 3.6%.
The White House is trying to show both empathy and action on Biden’s part with regard to inflation and its impact on American pocketbooks as the U.S. enters its holiday season.
The U.S. consumer price index, a broad survey of inflation, increased 6.2% last month from October 2020, the fastest annual pace since 1990. While many economists believe the abnormal inflation is due to unprecedented consumer demand following the pandemic shutdowns, Republicans have blamed Biden and his economic policies.
Just 43% of voters approve of his job performance, according to an analysis of polls by FiveThirtyEight. And a Washington Post-ABC News poll published earlier this month found that 70% of Americans regard the economy negatively, despite substantial growth in employment and economic output under Biden.
Recognizing the starring role rising prices are starting to play in politics, the Biden White House has pivoted from downplaying inflation as short-term and of little concern to highlighting an all-out effort to tame prices, despite the president’s limited powers.
The Federal Reserve is better equipped to combat inflation by raising interest rates or taking other measures to reduce the amount of money in the economy.
On Monday, Biden announced he would reappoint Jerome Powell as chair of the central bank and elevate Fed Governor Lael Brainard to vice chair. Their approach to combating inflation is sure to face scrutiny in upcoming congressional hearings.
©2021 Bloomberg L.P.