Trump battled the Powell Fed's rate hikes. Biden's betting on them

In Biden's first year alone they shot up 7% as demand for everything from cars to hamburgers far outpaced the economy's ability to fulfill it."Biden understands that the Fed's performance will influence the course of the economy and thus help to shape his and the Democrats' electoral fortunes," said George Washington University's Sarah Binder, author of a 2017 book on Fed governance.PLUNGING APPROVALThe higher prices are eating in to paychecks and outpacing strong wage growth as businesses try to woo workers after pandemic shutdowns and dislocations.They are also tanking Biden's approval ratings and have generated comparisons to the 1970s, when President Gerald Ford tried to force businesses into holding the line on prices and his successor Jimmy Carter appointed an inflation hawk - Paul Volcker - to finally end the upward spiral.So, far from fighting the Fed's pivot to tighter policy, Biden is in fact betting on it.If things go right, the Fed's raising rates from current near-zero levels will slow demand by making it more expensive to borrow and tempering spending impulses among consumers and businesses.Powell says the economy is strong enough to handle it and in fact will not be able to grow at its full potential if inflation stays high for too long and gets entrenched in business and household psychology.He also hopes for help in areas he cannot control - supply chains and the pandemic.