Stock markets today: Apple drags Nasdaq, while Dow nears record with Fed rate cut on horizon

The White House said Monday that a “critical turning point” had been reached in the three-year battle against rising inflation and that it was important to preserve progress in the job market.

“Inflation is returning to near normal levels, and it's important to preserve the important labor market progress we've made,” President Biden's National Economic Council director, Lael Brainard, said in a speech before the Council on Foreign Relations.

His comments came as the Federal Reserve prepared to cut interest rates for the first time in four years this week, as officials announced they were confident inflation was returning to their 2% target and that focus shifted to a cooling labor market.

Fed Chair Jay Powell said in his last speech in Jackson Hole, Wyoming, in late August that the Fed “will do everything we can to support a strong labor market as we make further progress toward price stability.” He noted that the Fed “does not seek or welcome further cooling in labor market conditions” and that the current level of policy rates gives the Fed “plenty of room” to lower rates in response to any weakness in the job market.

Brainard said the administration's policies to help combat rising commodity prices by promising to respect supply chain disruptions and the Fed's independence have helped moderate inflation.

“It was an important reversal [Biden’s] predecessor, who repeatedly criticized the Federal Reserve's monetary policy during previous administrations,” Brainard said.

Brainard emphasized that the administration's policies and measures work to address affordability challenges, including housing by building millions of new affordable homes and providing incentives for states and localities to remove old barriers to building. He also stressed the importance of subsidizing expensive childcare and expanding the workforce through investments in clean energy, semiconductors and AI to create jobs.

That's a far cry from what would weaken our economy by undermining the independence of the Federal Reserve and the rule of law, adding trillions to the debt and imposing a $4,000 sales tax on middle-class families,” he said.