Jean-Pierre on the Fed's Rate Hike: 'He's Put Lowering Costs for the Americans a Top Priority' (May 3, 2023)

On May 3, 2023, the Federal Reserve was expected to raise interest rates again, and it did, lifting its benchmark rate to a range of 5 to 5.25 percent that afternoon [2]. At the White House briefing earlier that day, a reporter asked Press Secretary Karine Jean-Pierre what the administration had to say to working families who would pay more on credit cards, mortgages and student loans. This short clip shows her answer, in which she listed a series of statistics on inflation. Quotes are from the official transcript published by the American Presidency Project [1], and each statistic is checked below against government data.

Key Moments

”About 48 hours since he’s had a public appearance”

Before the Fed question, the same reporter asked where Biden had been. “By time the President appears at a dinner tonight, it’ll have been about 48 hours since he’s had a public appearance. So, what has he been doing in that time?” [1]

“He’s been meeting with — having internal meetings in the Oval Office. I had a meeting with him earlier today with his senior — senior advisors, senior staff, talking about the issues that matter to the American people. It’s not unusual. This is something that he does every day,” Jean-Pierre said [1].

”Families who have already slid into debt”

“If the Fed raises interest rates again today, as it’s poised to do, costs for Americans who are borrowing on their credit cards, mortgages, and student loans are going to go up again,” the reporter said. “So, what does this administration have to say to working families who have already slid into debt over rising inflation and are now going to be paying more?” Jean-Pierre began with the Fed: “As you know, first and foremost, the Fed is an independent — is independent, and we do not comment on the — or interfere in their policies” [1].

”Lowering costs for the Americans a top priority”

“As it relates to inflation more broadly, this is a President that has — when it comes to his economic policy, he’s put lowering costs for the Americans a top priority,” she said. “We understand that the American people — some people are still feeling the squeeze and still feeling, kind of, the pressure, if you will, of where we are with our economy” [1].

The statistics

She then offered the administration’s numbers: “Inflation has fallen over the last nine months. Inflation is at the lowest rate it has been in almost two years, since May 2020. Inflation has fallen about 45 percent from its peak last year. Wages rose last month and are higher than they were nine months ago, accounting for inflation as well. Gas prices are down about $1.40 from the peak after Putin’s invasion. And grocery prices fell last month for the first time since September 2020.” She closed: “Again, we understand that there’s more work to do,” citing the Inflation Reduction Act’s provisions on energy and health care costs [1].

”Never Fall Into That Trap”

Near the end of the briefing, a reporter turned to the border. “Karine, when it comes to immigration, obviously the administration wants immigration reform, but why hasn’t the President brought in congressional leaders and tried to show leadership and come up with some kind of compromise that could pass?” [1]

“We’ve shown leadership. We’ve shown leadership on day one — on day one — by putting forth a piece of legislation to deal with comprehensive immigration reform,” Jean-Pierre answered [1].

The reporter followed up on Vice President Kamala Harris. “And what report card would you give the Vice President for her handling of the root causes of migration in Central America?” [1]

“So I’ve learned from my predecessor to never fall into that trap — (laughter) — of giving — giving — giving grades,” Jean-Pierre said. “What we can say from here is that the President appreciates and — and has been very impressed by her — by her partnership in this administration.” [1]

Background: What the Fed Said That Afternoon

The Fed’s statement, released at 2:00 p.m., described a strong job market and stubborn prices: “Job gains have been robust in recent months, and the unemployment rate has remained low. … Inflation remains elevated.” It added: “The U.S. banking system is sound and resilient.” It also softened its language about future increases, saying that “in determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time,” it would weigh “the cumulative tightening of monetary policy” and “the lags with which monetary policy affects economic activity and inflation” [2].

Fact Check

“Inflation has fallen over the last nine months” and “about 45 percent from its peak.” Accurate. The 12-month inflation rate had fallen from 9.1 percent in June 2022 [3] to 5.0 percent in March 2023 [4], a decline of about 45 percent.
“The lowest rate it has been in almost two years, since May 2020.” Wrong date. The Bureau of Labor Statistics said March’s 5.0 percent was “the smallest 12-month increase since the period ending May 2021” [4]. Her “almost two years” fits May 2021; “May 2020” would have been almost three years.
“Wages rose last month … accounting for inflation.” Accurate for the month: real average hourly earnings “increased 0.2 percent from February to March,” according to the BLS. Over the full year, however, real average hourly earnings “decreased 0.7 percent … from March 2022 to March 2023” [5].
“Gas prices are down about $1.40 from the peak.” Accurate. The national average was $5.006 a gallon in the week of June 13, 2022, and $3.600 in the week of May 1, 2023, a drop of about $1.41 [6].
“Grocery prices fell last month for the first time since September 2020.” Accurate. The BLS reported that the “food at home index fell 0.3 percent over the month, the first decline in that index since September 2020” [4].
Did she answer the question? Not directly. She did not say what the administration would do for families facing higher borrowing costs, beyond pointing to falling inflation and past legislation [1].

For other statements by Jean-Pierre that the record contradicted, see our article on her “$70 per gallon” mistake and other statements of hers that proved wrong.

What Happened Next

Rates: The Fed raised its target range again in July 2023, to 5.25 to 5.5 percent, its last increase of the cycle, and did not cut until September 2024 [7][8].
Inflation: The 12-month inflation rate fell to 3.0 percent by June 2023 [9].