President Joe Biden delivers a speech on Tuesday on his plan to fight inflation and lower prices for American consumers.
The event is scheduled to start at 11:30 a.m. ET. Look in the player above.
Biden’s speech follows a warning Monday from the Federal Reserve that Russia’s war in Ukraine and soaring inflation are now the biggest threats facing the global financial system, supplanting the coronavirus pandemic.
The observations came from the Fed’s semi-annual Financial Stability Report which examines trade and investment trends as well as major economic issues. The report is not an economic forecast and does not attempt to predict the next risk to the financial system. But it highlights areas of concern for central bankers.
The Fed said economic uncertainty had increased since the bank’s previous report, with the war in Ukraine being a big part of the deterioration. The bank also pointed to sharp swings in asset prices – from Treasuries to stocks – as investors reassess risk in an environment of high inflation.
“Inflation has been higher and more persistent than expected, even before the invasion of Ukraine, and uncertainty about the inflation outlook poses risks to financial conditions and economic activity,” he said. the Fed in its report.
The Fed said persistently high inflation could force central bankers to raise interest rates quickly, which could also pose a potential risk of financial instability in the form of lower economic output as well as higher borrowing costs for individuals and businesses. This could cause debt levels, which the Fed says are high but not yet a major concern, to become unsustainable for some companies.
“Further adverse inflation and interest rate surprises, particularly if accompanied by a decline in economic activity, could negatively affect the financial system,” the bank said.
For individuals, inflation could lead to job losses as the Fed raises interest rates, which could also impact the housing market via higher mortgage rates, the bank said.
Because the report reflects Fed thinking, its findings could form part of the backdrop when the central bank conducts its annual stress tests of the nation’s largest banks in the coming weeks. The Fed used previous reports to highlight the pandemic as well as last year’s interest in “meme” stocks such as GameStop and AMC Entertainment.