Fears of inflation in the United States are soaring to new highs as more and more experts are warning that it could become a major problem in the years ahead because of President Biden’s massive spending.
“Fears of inflation in the year ahead hit its highest level on record, according to a report by the Federal Reserve Bank of New York,” CNBC reported. “Overall, the expectation is that the inflation rate will be up to 4% one year from now — a new high for one-year-ahead inflation expectations — and at 3.6% three years from now, the highest level since August 2013.”
JPMorgan Chase CEO Jamie Dimon warned that there is a very high likelihood that the inflation will not be temporary as the Biden administration has been trying to claim it will be.
Dimon said, “[Our bank has] a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory.”
“If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates,” Dimon said. “I do expect to see higher rates and more inflation, and we’re prepared for that.”
The Wall Street Journal reported early on Tuesday morning that economists that it surveyed believe that the producer-price index will rise .5% for the month of May, a figure that “measures the average change over time in the selling prices received by domestic producers for their output,” according to the Department of Labor.
Larry Summers, who held top economic positions in the Clinton and Obama administrations, told PBS’s “Firing Line with Margaret Hoover” last week that the enormous amount of spending that Biden has done risks melting down the economy if it overheats.
“If you looked at how the economy was coming into this year, we had total wages and salaries coming to people were 20 or 30 billion dollars a month lower because many of them had to be home because of COVID and the economy was slowed,” Summers said. “But we put in a stimulus that was putting into the economy more than 200 billion dollars a month. And so when you take a hole and you overfill it, you’re likely to have problems.”
“And I think we know that inflation’s like a lot of other things, it’s a lot easier to prevent than it is to cure,” he continued. “And I think the credibility of policymakers, including those at the Fed, is much easier to preserve than it is to restore.”
“The main risk is that our economy’s going to overheat,” he later added. “And then once it overheats, it’s going to be hard to put out the fire without doing a lot of damage and causing a lot of problems. And so I’d like to see us shift towards a policy concern. I mean, let me give you another example.”
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Source: Dailywire
