What was the state of inflation and the Federal Reserve policy when Biden left office?

1. From four‑decade high to “still above target”: how inflation trended by January 2025

Inflation peaked in mid‑2022 — the 12 months ending June 2022 saw a 9.1% increase in the CPI — and then cooled over the next two-plus years; by January 2025 the year‑over‑year CPI was about 3.0%, still well above the Fed’s 2% objective and higher than the pre‑pandemic norm ^{[2] [1] [3]}.

2. What happened to real wages and purchasing power during Biden’s term

Analysis of wages and prices through January 2025 shows wages rose substantially in nominal terms but did not fully keep pace with price growth over the whole period: wages increased about 19.9% while prices rose about 21.5% from January 2021 through January 2025, producing an overall small decline in real average hourly earnings of roughly 1.3% over the four years ^[1].

3. The Federal Reserve’s policy path entering January 2025

Confronted with high inflation in 2021–22, the Fed raised its policy rate rapidly through 2022–23. By late 2024 and into early 2025 policymakers had shifted to trimming rates: the Fed reduced its policy rate to about 4.65% in November and again to about 4.4% in December, leaving the effective stance in the mid‑4% area as Biden departed office ^[1].

4. Fed aims, internal debate, and the stance of policy

Fed officials in 2025 framed the trade‑offs clearly: price stability and maximum sustainable employment both mattered, and while policy had eased from its peak, some regional Fed presidents and officials in late 2025 said policy was “mildly restrictive” and expressed hesitation about further cuts given inflation remained above target ^{[5] [4]}. The committee’s 2025 framework review also reflected lessons from recent years, underscoring ongoing attention to inflation risks ^{[6] [7]}.

5. How contemporaneous reporting and analyses portrayed the situation

Fact‑checking and data pieces noted the sharp spike in 2022 (9.1% peak) and a gradual cooling through 2023–24 to still‑elevated rates at the end of Biden’s term; Investopedia and other outlets summarized the average inflation over Biden’s years at about 4.95% while retrospective pieces emphasized the decline to roughly 3.0% by January 2025 ^{[8] [2] [1]}. Political actors used these numbers for competing narratives: some Republican critiques put cumulative price increases under Biden in stark terms, while other accounts highlighted the progress in reducing inflation from its 2022 highs ^{[9] [10] [11]}.

6. What remained uncertain or debated in the sources

Available sources do not mention precise daily Fed funds market pricing on the exact day Biden left office beyond the rate‑range context, nor do they provide a single unified “final” Fed policy statement dated to his last day; instead, reporting shows a sequence of cuts into the mid‑4% range and an active internal debate among policymakers about the pace of further easing ^{[1] [4] [12]}. Some outlets emphasize political framing — calls that spending caused inflation or that policy had solved it — and those claims are presented in the sources as partisan arguments rather than uncontested facts ^{[9] [10] [11]}.

7. Bottom line for readers

At the time Biden left office, inflation had fallen substantially from the mid‑2022 peak but remained above the Fed’s 2% goal (about 3.0% in January 2025), and the Federal Reserve had moved from aggressive tightening into cautious rate cuts that left the policy rate in the mid‑4% range, with officials debating the path forward because inflation still posed risks ^{[1] [2] [4] [5]}. Sources show both technical economic metrics and partisan narratives; readers should separate the data (CPI levels and Fed rate moves) from political claims about responsibility and success, which are contested across the cited reporting ^{[2] [9] [10]}.