Treasury Secretary Janet Yellen told CNBC that President Joe Biden has several strategies to reduce inflation.
She said his plans are aimed at prescription drug costs, the budget deficit, and oil production that could bring down escalating prices.
"The president emphasized his intention to do everything he can to lower the costs that Americans face for important items in their budget," Yellen said Tuesday after a meeting she had with Biden and Federal Reserve Chair Jerome Powell.
"Prescription drugs, for utility bills, things where the president acting on his own or working with Congress can make a difference, and also his support for deficit reduction.”
An inflation gauge closely tracked by the Federal Reserve rose 6.3% in April from a year earlier, just below a four-decade high set in March.
Food inflation was up by 10% in April, the highest since 1981, according to a recently released report from the Bureau of Economic Analysis.
Moody's Analytics chief economist Mark Zandi told C-SPAN on Tuesday that there was a 1-in-3 chance of a recession this year and ''even odds'' within the next two.
The Fed has approved two rate hikes this year totaling 75 basis points, with officials indicating that additional 50 basis point increases were likely over the next several meetings.
Yellen, Powell's immediate predecessor as head of the central bank, said the Fed was most responsible for controlling inflation.
"The Fed has a dual mandate and it is maximum employment and price stability. I think that’s the way it's phrased in the law," she told CNBC.
"But we are at full employment. We have a very strong labor market. That's been achieved, but inflation is way too high, and it's really a big burden on American households. And so maintaining full employment while bringing inflation down, that's the president’s priority, and I believe that's consistent with how the Fed sees its programs."
Powell and Yellen spent much of last year saying that inflation was "transitory" and likely to lessen when supply chain problems and outsized demand for goods over services returned to normal after the COVID-19 pandemic.
Yellen told CNN on Tuesday that she was wrong in the past about the path inflation would take, but said taming price hikes was Biden's top priority.
Yellen told CNBC that a spending package "could very well have reductions on the costs of prescription drugs that would make a difference to every family that has drug costs as part of its household budget."
Although that "could make a difference very quickly," Yellen added that most of the administration’s plans likely would take longer to help the economy.