The Biden Administration Is Quietly Obsessing Over Inflation

“We believe that inflation is most likely to rise moderately in the next few months,” wrote two officials on Mr. Biden’s Economic Advisory Council, Jared Bernstein and Ernie Tedeschi, in a blog post on Monday in which they outlined some of the government’s considerations. “However, we will carefully monitor both actual price changes and inflation expectations for signs of unexpected price pressures that may emerge as America moves out of the pandemic and enters the next economic expansion.”

Some Republicans call this attitude dangerous. Florida Senator Rick Scott, chairman of his party’s campaign arm for the 2022 midterm election, has called on Mr Biden and Mr Powell to come up with plans to fight inflation.

“The president’s refusal to address this critical issue has a direct negative impact on Floridians and families in our country and hurts most low- and steady-income Americans,” Scott said in a press release last week. “It is time for Biden to wake up from his liberal dream and realize that reckless spending has consequences, inflation is real, and the American debt crisis is escalating. Inflation is rising and Americans now deserve answers from Biden. “

Recent governments economic teams have given little thought to inflation, as inflationary pressures have been low for decades. It has failed to meet the Fed’s average target of 2 percent for 10 of the past 12 years and is at 2.5 percent amid the longest economic expansion in history.

Just before the pandemic recession hit the United States in 2020, President Donald J. Trump’s economic team wrote that price inflation would remain low and stable even with unemployment below 4 percent. When President Barack Obama’s economy struggled to get out of the 2008 financial crisis, White House officials feared that prices might fall instead of rise.

“In the face of the economic downturn, we were concerned about preventing deflation rather than inflation,” said Austan Goolsbee, chairman of the Council of Economic Advisers during Mr. Obama’s first term.

The conversation has changed given the huge sums of money the federal government is pouring into the economy, first under Mr Trump and now under Mr Biden. Since the pandemic began, Congress has approved more than $ 5 trillion in spending, including direct checks to individuals.

Comments are closed.