President Biden was accused of failing to control inflation amid "historic deficits" by a top US economist.
CEO and Chairman of Strategas Research Partners Jason Trennert said that the President's economic plans are at odds with what the Federal Reserve System is trying to achieve.
Trennert told GB News: "It’s difficult to control inflation when you’re running historic deficits.
"The fiscal policy of the Biden Administration is completely at odds with what the Fed is trying to achieve."
CEO and Chairman of Strategas Research Partners Jason Trennert spoke about President Biden's fiscal plans
Reuters/CNBC
It comes after the Dow Jones Industrial Average posted its biggest one-day percentage drop in nearly 11 months, after a Labor Department report showed US consumer prices increased above forecasts in January amid a surge in the cost of shelter.
CNBC reports the Dow Jones Industrial Average lost 524.63 points, or 1.35 per cent, to close at 38,272.75 in its worst session since March 2023 on a percentage basis.
At its lows, the 30-stock index sank 757.52 points, or 1.95 per cent.
The S&P 500 slid 1.37 per cent to close at 4,953.17, while the Nasdaq Composite fell 1.8 per cent to settle at 15,655.60. The Russell 2000 also suffered, tumbling nearly four per cent for its worst session since June 2022.
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The Dow Jones Industrial Average posted its biggest one-day percentage drop in just under a year
Reuters
Chief equity strategist at US Bank Wealth Management Terry Sandven said: "Equities are in retreat mode following a still inflationary CPI report. The higher for longer inflation is a setback for the Federal Reserve."
Despite the news, President Biden came out fully in support of the US economy, saying there was some of the strongest recovery in five decades.
He said: "Today’s data shows that wage growth has been the strongest of any economic recovery in 50 years – and inflation declined two-thirds from its peak. I'll continue to fight to lower costs for middle-class families and stand in the way of Congressional Republicans who disagree."
On Saturday, Biden tweeted the "good news" to start the weekend, saying: "The stock market going strong is a sign of confidence in America’s economy."
Meanwhile, oil prices settled higher on Tuesday as geopolitical tensions continued in the Middle East and Eastern Europe, but gains were curtailed as investors reined in expectations for the US Federal Reserve interest rate cuts.
A US government report showed consumer inflation stayed elevated last month. Fed policymakers are now expected to wait longer before cutting interest rates.
This could dampen economic growth and oil demand, and it also boosted the dollar to three-month peaks, which reduces demand for oil among buyers paying in other currencies.