(Bloomberg) — President Joe Biden’s top economic adviser said that the U.S. may see some difficulties as it contends with elevated inflation and further supply-chain challenges stemming from Covid lockdowns in China and the Russian invasion of Ukraine.

“We are facing a lot of uncertainty, we are facing rocky waters right now,” the director of Biden’s National Economic Council, Brian Deese, said on Bloomberg Television’s “Balance of Power with David Westin.” At the same time, “the United States is probably better positioned than any other major economy to navigate effectively through them,” he said.

Deese did not give any estimates of the likelihood of an American recession, but said that the risks are greater in other countries.

He cited a robust U.S. labor force — last month’s unemployment fell to 3.6% — which is almost at its pre-pandemic levels — and strong household balances and consumption.

‘Elevated’ Inflation

While the consumer price index, due on Tuesday, will show an “elevated print” for March, Deese said that inflation should be lower by the end of this year. 

Deese stated that the Biden administration had worked to improve container processing at key ports, which is a crucial bottleneck in supply chain management during pandemic. They also released petroleum reserves to help combat rising gasoline prices.

If the Biden administration can move forward with those efforts, “we will see inflationary pressures moderate. They will be lower than they are today at the end of this year and lower still in the coming year,” Deese said. “That’s our focus and that’s our hope.”

He also said that U.S. officials are “closely” monitoring the situation in Shanghai, where a surge in Covid cases has triggered lockdowns that threaten renewed supply-chain complications.

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