White House press secretary Jen Psaki said Friday that the Biden administration’s $1 trillion infrastructure bill, which President Biden plans to sign into law on Monday, and the $1.75 trillion reconciliation package still pending before Congress will help lower inflation.
“I would note that everyone from the Federal Reserve to Wall Street agree with our assessment that inflation is already expected to substantially decelerate next year,” Psaki said during the press briefing. “And economists across the board also agree that the president’s economic agenda…will not add to inflationary pressure and will ease inflationary pressure over the long term.”
Psaki added that rising costs for consumers are “of course a concern to the president. Our view is that the real risk here is inaction.”
The comments come days after the Labor Department announced that the consumer price index rose 6.2 percent over the previous year, the highest increase in 31 years, with broad price increases across sectors. Psaki insisted that “most economists” believe inflation will come down in 2022, and chided Republicans for “screaming about inflation” in her remarks.
Former treasury secretary Larry Summers and former Obama administration economist Jason Furman both said policymakers were “behind the curve” when it comes to inflation, in interviews this week.
Summers has backed the Biden administration infrastructure and reconciliation bills, predicting they will not add to inflationary pressure. However, Summers blamed the Fed’s monetary policy as well as the Biden administration’s stimulus package passed last spring for rising inflation, warning that inflation “spirals.”
“It can be broken, but it needs to be broken by some kind of dramatic action, and those kinds of dramatic actions often cause recessions,” Summers told CNN’s Cuomo Prime Time on Wednesday. “I think we’re speeding down the road at a really rapid rate…and it’s not going to be so easy to put the breaks on.”
“I think the Fed has been a little bit behind the curve and they are going to be tested next year, Furman, the former chairman of the Council of Economic Advisers under President Obama, told CNBC’s Squawk Box on Thursday.
Source: National Review
