© Reuters. FILE PHOTO: Heather Boushey, appointed to be a member of the Council of Economic Advisers, speaks as U.S. President-elect Joe Biden announces nominees and appointees to serve on his economic policy team at his transition headquarters in Wilmington, Delawa
By Andrea Shalal
WASHINGTON (Reuters) – A top White House economist on Tuesday said Federal Reserve interest rate hikes aimed at curbing inflation were having a negative impact on the banking sector, and warned Republicans against worsening the situation with their debt ceiling threats.
Heather Boushey, a member of the White House Council of Economic Advisers, told Reuters that Republicans should not be “playing games” with the U.S. economy.
“The economy remains, it’s been strong. You don’t want to be pushing it off of the course that it’s on,” Boushey said. “The Fed is raising interest rates in the hope of reducing inflation. That is having this negative effect on the banking sector. Why would we add to that?”
Boushey said Congress could easily remove the risk of default by raising the debt ceiling, while the broader issue of interest rates and their impact on bank assets was a far more complicated question that no single entity had the power to solve.
Boushey’s comments come as Fed governors are gathered for a two-day policy meeting that analysts expect to result in a 25-basis-point increase in the federal funds rate on Wednesday.
The White House on Tuesday said President Joe Biden will not negotiate over the debt ceiling during his meeting with four top congressional leaders on May 9, but he will discuss starting “a separate budget process” to talk about spending priorities.
Biden on Monday summoned the four Senate and House of Representatives leaders — two fellow Democrats and two Republicans — to the White House next week, after the U.S. Treasury warned the government could run short of cash to pay its bills as soon as June 1.
Exclusive: White House’s Bousheh
Recently, the White House has announced that their new Chief Economist is Heather Boushey, a high profile economist and a progressive thinker.
Boushey undoubtedly brings a wealth of knowledge and experience to the White House, having already worked closely with the Obama administration as a member of the Council of Economic Advisors and as executive director of the left-leaning think tank, Washington Center for Equitable Growth.
In addition, Boushey is a noted feminist thinker, whose research regularly addresses the fact that economic growth should not just benefit the wealthy but should be shared more equitably. She is particularly respected for her work on the gender wage gap and parental leave policies.
Speaking to her appointment, President Biden said “Heather brings a much-needed expertise in economic policy and a strong appreciation for both how powerful economic growth can be, and how important it is to ensure that everyone shares in this growth.”
The appointment of Boushey to the White House is a signal to the world that the Biden administration is serious about addressing income inequality. Her larger body of work calls for collaborative policy solutions to achieving greater economic equity and her passion for empowering women globally is especially encouraging.
It is an exciting time for the White House, as Heather Boushey brings a unique set of skill and experiences that will surely help guide the country’s economic future. We look forward to seeing the positive impact that her appointment brings.