On The Money — Biden: America should 'rest easy' about prices

Happy Tuesday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.

Today's Big Deal: President Biden is seeking to assure Americans about the cost of gas and gifts. We'll also take a further look at the president's decision to stick with Jerome Powell as Federal Reserve chair.

For The Hill, we're Sylvan Lane, Naomi Jagoda and Aris Folley. Reach us at slane@thehill.com or @SylvanLane, njagoda@thehill.com or @NJagoda and afolley@thehill.com or @ArisFolley.

Let's get to it.

President optimistic about gas, goods prices

President Biden, in Tuesday remarks about the rising costs of goods and gas this Thanksgiving, argued in an optimistic tone that the economy is ready for the holiday rush.

The president said that high gas prices are a problem in the U.S. and globally. But he touted the release by the Department of Energy of 50 million barrels of oil from the nation's Strategic Petroleum Reserve, which the White House announced earlier on Tuesday.

"This is a problem, not just here in the United States, but around the world," Biden said in remarks at the White House, referencing the record-high cost of gas in Europe and Asia.

More info on the release of oil reserves:

• Of the 50 million barrels being released from the reserve, 32 million will eventually be returned to it over the coming years once fuel prices fall back down in a bid to ensure the reserve remains stocked. Another 18 million barrels will be released as an acceleration of an oil sale Congress had already authorized.

• The announcement was made in concert with India, Japan, South Korea and the United Kingdom, all of which agreed to release oil from their own reserves.

• Biden has also asked the Federal Trade Commission to investigate whether the oil and gas industry acted in any illegal or anti-competitive way that could result in higher gas prices for consumers.

Read more from The Hill's Alex Gangitano here.

LEADING THE DAY

Biden sidesteps Fed fight, disappointing progressive allies

President Biden sidestepped a battle over the leadership of the Federal Reserve by disappointing progressive allies and sticking with Jerome Powell, whom former President Trump nominated as Fed chairman four years ago.

Senate aides predict Powell will easily have enough votes to secure confirmation to a second term atop the central bank and warned that Biden would have had a much tougher fight on his hands had he instead picked Lael Brainard, the only Democrat on the seven-member board and the favorite of a number of progressives.

• An aide said choosing Brainard to replace Powell would have risked an all-out battle that could have ended in defeat if Republicans managed to convince Sens. Joe Manchin (D-W.Va.) or Kyrsten Sinema (D-Ariz.) to vote with them. Biden offered an olive branch to progressives by nominating Brainard for vice chair.

• Senate Republicans have made rising inflation a top political issue in recent months, and some Democratic strategists see Powell as a better messenger to respond to criticisms about rising prices because he is a Trump appointee.

• Progressives warn Powell's reluctance to use the Fed to prepare the U.S. economy for the potentially devastating effects of climate change is short-sighted, though Powell is believed to have softened his aversion to letting Fed decision-making be influenced by climate considerations.

Read more from The Hill's Alexander Bolton here.

TAX UPDATE

Biden plan would raise average tax rate for households above $1M: JCT

Households with income of at least $1 million would see their average tax rate increase in 2022 under House Democrats' social spending and climate bill, according to a corrected report released by the Joint Committee on Taxation on Tuesday.

The average tax rate for those taxpayers would increase from 29.9 percent under current law to 33.1 percent, the report said.

The corrected report comes after the committee, Congress's nonpartisan tax scorekeeper, released a report Friday that found that the average tax rate in 2022 for taxpayers with income of at least $1 million would decrease slightly, from 29.9 percent to 28.2 percent.

That finding caught the attention of some right-leaning tax experts. However, the committee said Tuesday that it had initially made an error in calculating the average tax rates for 2022.

Read more about the corrected JCT report here.

MONEY TO BURN

Americans planning to spend slightly more on holiday gifts than in 2020: poll

Americans are expected to spend an average of $886 on holiday shopping this year, a slight increase from last year and a bump from 2019, when the average was just above $800, according to the latest Gallup poll released Tuesday.

Despite inflation causing the price of many products to soar, the holiday season is expected to be as busy as ever. Retail sales in the U.S. during the season are expected to rise between 3.7 percent and 5.3 percent compared to last year, Gallup found.

"Many factors, most notably inflation and the pandemic, could influence how much consumers spend on gifts this season and where they ultimately shop," Gallup reported. "But as of November, Americans intended to spend a fairly robust amount that should translate into solid holiday sales for the U.S. economy."

Read more here.

Good to Know

Following the most recent failed round of negotiations, Kellog's said it would be moving onto the next phase of its contingency plan, which is to hire permanent replacement.

Here's what else have our eye on:

• Dollar Tree announced on Tuesday that it is increasing its price point to $1.25.

• Apple has filed a lawsuit against NSO Group, the Israeli spyware developer blacklisted by the Biden administration earlier this month, accusing the firm of targeting and surveilling Apple users.

That's it for today. Thanks for reading and check out The Hill's Finance page for the latest news and coverage. We'll see you tomorrow.