Wednesday, Federal Reserve Chairman Jerome Powell claimed during a panel at the ECB Forum on Central Banking in Sintra, Portugal, that massive government spending did not drive increased inflation.
Massive Government Spending Bill
Federal Reserve Chairman Jerome Powell said that the massive government spending bills are money showing up in infrastructure construction and it is an important driver of inflation.
Daily Caller news reported that the Co-host Sara Eisen during the panel also mentioned earlier that the American Rescue Plan, the Inflation Reduction Act, the CHIPs Act, and the infrastructure bill were passed into law during the first two years of the Biden administration.
Multiple experts said that the massive government spending could provoke inflation as President Joe Biden campaigned for the American Rescue Plan. The $1.9 trillion, was signed into law in March 2021 by Biden including $350 billion in funds for state and local governments, $160 billion for healthcare related to COVID-19, stimulus checks, and $86 billion for various unions.
Lawrence Summers, who is a Secretary of the Treasury in the Clinton administration and as an economic advisor to former President Barack Obama, warned in February 2021 op-ed about possible inflation due to the amount of money being spent. Former Obama administration official Steve Rattner also warned about the risk of inflation in March 2021 op-ed in The New York Times news report.