President Joe Biden said Wednesday that multi-trillion dollar spending bills proposed by his administration and congressional Democrats will reduce inflation, not drive it.
Biden was responding to a question during a CNN town hall, in which a college student asked how his administration is preventing the economy from “overheating” and driving up prices on the low- and middle-class. When asked by moderator Don Lemon if “pumping all of this money into the economy” would drive higher inflation, Biden cited an analysis released Wednesday by Moody’s arguing his spending proposals would promote economic growth without increasing inflation.
“Moody’s today, a Wall Street firm not some liberal think tank, said if we pass the other two things I’m trying to get done, we will in fact reduce inflation, reduce inflation, reduce inflation,” Biden said.
“We’re gonna be providing good opportunities and jobs for people, who in fact are going to be reinvesting that money back in all the things we’re talking about, driving down prices, not raising prices,” the president added. “I don’t know anybody… suggesting that there’s any long-term march here.” (RELATED: The Numbers Are In, Biden’s Inflation Is Not Going Away)
Biden also said, however, that prices have gone up in some sectors of the economy, attributing it to businesses getting back on their feet after the pandemic. The president also told a restaurant owner that his business may continue to “be in a bind” for a while longer.
In late May, as inflation began ramping up alongside the re-opening economy, numerous top economists predicted there would be an increase in inflation, at least in the short-term. A key Federal Reserve measure showed inflation increased more between June 2020 and May 2021 than any other 12-month period since the 1990s. (RELATED: Bipartisan Infrastructure Framework Fails To Advance In The Senate)
Biden’s Treasury Secretary, former Federal Reserve Chair Janet Yellen, predicted the economy will see “rapid inflation” in the coming months after repeatedly insisting inflation was not a concern during the first several months of her tenure. A New York Federal Reserve report released in June found consumer fears about inflation had reached an all-time high.