This is because the plan will be gradually implemented within 10 years.
Washington state-Treasury Secretary Janet said on Sunday that President Joe Biden’s proposal to invest heavily in infrastructure, households and education will not stimulate inflation, as the plan will be gradually implemented within 10 years.
The new report shows that the economy is recovering after the recession caused by the coronavirus pandemic. Driven by the $1,400 grant provided by the federal government to the public, U.S. income rose to the highest level on record in March, and the economy grew at an annual growth rate of 6.4% in the first three months of this year. Concerns about inflationary pressures.
Some economists, including former Secretary of the Treasury Larry Summers (Larry Summers), warned that the Fed’s extremely low current interest rate, plus the Biden administration’s proposal, is in addition to the approximately $5 trillion that it already has. In addition, there will be an additional $4 trillion in new expenditures. Approved by Congress, at the risk of increasing inflation.
Biden outlined his expansion plans in a speech to Congress last week. These proposals will expand the social safety net for minors, raise taxes on the wealthy, and provide funding for ambitious infrastructure projects, with the goal of stabilizing the economy by providing employment opportunities for the middle class over the long term.
Fearing inflation, Yellen said in an interview with NBC’s “Meet the Press” that the proposed spending “will take effect after the economy recovers.”
“It spreads fairly evenly in eight to ten years. Therefore, the urge to demand is mild,” he emphasized. He said: “I don’t think inflation is a problem, but once it occurs, we have the tools to solve it.”
Former Fed Chairman Yellen said that the central bank “has the tools to offset inflation when it rises.”
Fed Chairman Powell has made it clear that he does not think oil prices will rise sharply. Powell bet that even if the economic recovery intensifies, the Fed can keep interest rates low, and it does not have to raise interest rates quickly to stop inflation.
Yellen said that Biden’s plan is “a historic investment, and we need to make our economy productive and fair.”