A MARTÍNEZ, HOST:
Consumer prices are still climbing much too fast. A report from the Labor Department this morning shows that annual inflation in April was a little lower than the month before. But that's cold comfort to people whose paychecks just don't go as far as they used to. At the White House Tuesday, President Biden said fighting inflation is now his top domestic priority.
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PRESIDENT JOE BIDEN: I know that families all across America are hurting because of inflation. I understand what it feels like. I come from a family where when the price of gas or food went up, we felt it. It was a discussion at the kitchen table.
MARTÍNEZ: It's a discussion around a lot of kitchen tables these days. NPR's Scott Horsley is here now. Scott, annual inflation in March was the highest in more than 40 years. April's figure a little better. What happened?
SCOTT HORSLEY, BYLINE: Yeah. The annual inflation rate in April was 8.3%, A. That's a little lower than the 8 1/2% in March, but not much, and especially because a lot of the relief came from a temporary drop in gasoline prices last month. That reprieve was short-lived. Gas prices are now back in record territory. The price of used cars, which was also a big driver of inflation last year, came down a little bit in April. But, you know, inflation is still running 3 to 4 times as hot as the Federal Reserve's long-term target.
MARTÍNEZ: All right. So what's the outlook for months to come?
HORSLEY: Well, simple math should offer a little bit of relief. We're coming up on the anniversary of the time last year when prices took off, so even if prices don't come down very much, the annual increase should look smaller. Other prices are still climbing, though. Last month, for example, there was a big increase in the price of airline tickets, and we could see more of that this summer as people are traveling more. New price - new car price - prices continue to climb. And rent increases are just really starting to show up in the data. So it may turn out that March was the peak month for annual inflation, but the slide down from that peak looks to be slow and bumpy.
MARTÍNEZ: Now, inflation has really been a big drag on President Biden's approval rating. What, if anything, can he do about inflation?
HORSLEY: Not a whole lot. He did order the big oil releases from the Strategic Petroleum Reserve, and you can see how much good that's done. He's also tried to address some of the transportation snarls around the country. Biden was asked yesterday about lifting some Trump-era tariffs, which could lower the price of imports from China. He said the administration is talking about that but hasn't made any decisions. Ultimately, inflation's not really something the president has a lot of power over. The - Biden acknowledged that it's really the Federal Reserve's job to take care of this.
MARTÍNEZ: So what can the Fed do?
HORSLEY: Well, it can use its sledgehammer. It can raise interest rates to cool off demand. The Fed has started making it more expensive for consumers to borrow money in hopes that will have people buying less. And it'll turn this, you know, boiling economy down to a simmer. The central bank raised interest rates by half a percentage point last week and also signaled that two more of those jumbo rate hikes are likely in June and July. This has caused some uncertainty about the outcome and some wild swings in the stock market. But Chris Waller, who sits on the Fed's board of governors, says he and his colleagues are ready to dish out some strong monetary medicine.
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CHRIS WALLER: At this point, I don't care what the reasons are. Inflation's too high, and my job is to get it down. That means we have to raise rates. We have to cool off demand and try to get inflation pressures down. If we get some help from supply chain resolution, that's fantastic. But I'm not counting on it.
HORSLEY: By the way, Waller will soon have a new colleague on the Fed board. Last night, the divided Senate confirmed Lisa Cook along straight party lines, with Vice President Harris casting the tie-breaking vote. Cook will be the first African American woman to serve on the Fed's governing board.
MARTÍNEZ: That's NPR's Scott Horsley. Scott, thanks a lot.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
