White House Council of Economic Advisers member Jared Bernstein joins Yahoo Finance Live to discuss inflation, Consumer Price Index (CPI) data, Fed policy, and the outlook for imports.

Video Transcript

BRIAN CHEUNG: Welcome back to Yahoo Finance Live. Just after the noon hour here on the East Coast, let's take a look at where markets are trading. The S&P 500 down 3/10 of a percent. The Dow also seeing some red, down a quarter of a percent, as is the NASDAQ, so red across the board after that big inflationary print that we had gotten on the consumer price index this morning.

Again, as a recap, the numbers at 8:30 this morning showed that there were price changes on a month over month basis between December and January of 0.6%. That was above the Street's estimates. And on a year over year basis, inflation clocking in 7.5% higher between January of this year and January of last year.

So let's get a little bit more color on the inflationary picture with Jared Bernstein, White House Council of Economic Advisors member down in DC. Jared, it's great to have you on the program this afternoon. A simple question here, I guess-- was the number that we got this morning above your expectations?

JARED BERNSTEIN: Well, it was slightly above market expectations, but we are in a climate where we know American households are facing significant price pressures. And that is something that we knew well before this print. And for us, it just means we have to continue to do everything we can to hit the president's top two economic priorities. The first is to create and continue to maintain a strong, growing economy with lots of job offers.

And the second is to lower prices that households are facing from this global problem of inflation related to the pandemic. That takes us right to our agenda to help unsnarl supply chains, increase competition, make sure that we're doing what we can to lower costs-- prescription drugs, health care premiums, education, child and elder care. All of that are key parts of our agenda, underscored by these results.

BRIAN CHEUNG: Jared, one challenge here is that the inflation is broad-based across all the categories. And I know that there have been some proposals for what the White House can do, for example, suspending the federal gas tax. But gasoline actually went down by 0.8% on a month over month basis. How will things like that address the fact that inflation has spread into nearly everything?

JARED BERNSTEIN: Well, I think when it comes to the broad inflation mandate, first and foremost, we're really talking about the Federal Reserve. And this president has consistently underscored his faith, not just in the institution of the Fed and the critical importance of their independence from the White House, but also that of the five nominees he has slated to be on the board. And again, he has deep faith in their ability to achieve full employment and stable prices.

I think when it comes to the categories that you mentioned, our goals remain very much the same. We know that supply chain snarls have been implicated in prices, elevated prices especially on the goods side of the equation. And that's why our interventions at the ports, moving to 24 and 7, making sure goods are getting from ship to shelf, dwell times of containers down about 30% from their peak. And in fact, 20% to 30% more throughput is going through the ports. We just have very strong demand there. And that's creating some of these price pressures.

AKIKO FUJITA: Jared, energy clearly a big pain point when you think about year on year, 27% jump. Gas is up 40% year on year. We heard Jen Psaki say earlier this week that all options are on the table in terms of this specific issue. Does that include another coordinated release of the Petroleum Reserve, similar to what we saw last year?

JARED BERNSTEIN: Yeah, it's a fair question. Let me give you a fulsome answer. First of all, last year, just to remind listeners, the president coordinated with other countries that also have strategic reserves to do a global release. And lo and behold, the price of gasoline fell about $0.10 per gallon. Now it wasn't just the reserve release. There were a lot of other dynamics. It's a global price, lots of moving parts. But that option certainly remains one that we can put on the table as need be.

We also have diplomatic channels we continue to pursue with oil producing countries on their proposed production commitments. And the president is also consistently invested in protecting consumers from any kind of abuse. We have volatile markets, but to the extent that any firms are exploiting any volatility to extract profits from consumers, that is not OK with this president. And he will continue to press on that option as well.

AKIKO FUJITA: And finally, Jared, where does the White House stand right now on removing tariffs on imports coming in from China? I realize those cost increases that come with the additional tax coming in on imports, that doesn't get you to 7 and 1/2% inflation we're talking about. And yet, it is still a cost increase. We saw the president already extend the solar tariffs. Could we expect additional action on the other Chinese imports?

JARED BERNSTEIN: You know, it's again, it's a great question. But when it comes to an issue like that, I'm not an independent actor, and I'm not going to lean over my skis and speak for myself. There is an ongoing process, and it involves many components, not just the executive office of the president, but also, of course, the US trade representative. So we are continuing to discuss precisely those kinds of questions. And when we have a readout, I promise to come on and talk about it.

BRIAN CHEUNG: All right, we'll definitely have to do that. Jared Bernstein, White House Council of Economic Advisors member, thanks for stopping by.