White House Press Secretary Jen Psaki said that inflation is being utilized as a “political cudgel” and predicted that it will decrease next year.
During a press briefing on Friday, Psaki was asked about the administration’s view on rising price levels — which are now accelerating at a 6.2% year-over-year rate.
“One in four Americans, according to a new survey, have experienced some kind of loss of income as a result of higher prices,” noted one reporter. “The president has expressed concern about this. I know that you were working on different fronts… to address this, but, I mean, how urgent is it? And … is there any sort of specific concern that this is going to affect not just political outcomes, but just the overall economy?”
“First, let me say that, you know, a lot of talk about inflation — I’m not saying from you, but in general out there… it’s become a political cudgel and it shouldn’t be,” Psaki responded. “It’s impacting, as you said, millions of Americans, no matter their political party. And that’s certainly of concern to the president.”
“I would note that everyone from the Federal Reserve to Wall Street agree with our assessment that inflation is already expected to … substantially decelerate next year. I know you’re not talking about that, but that’s an important component here.”
Days earlier, however, Goldman Sachs released an analysis expressing concern that inflation will eclipse new COVID-19 outbreaks as the primary threat to global economic growth. The investment bank forecasted that core Consumer Price Index inflation will remain above 4% next year.
Psaki continued: “And economists across the board also agree that the president’s economic agenda — the Bipartisan Infrastructure Bill that he will sign on Monday and the Build Back Better Bill that we’re working to move forward — will not add to inflationary … pressure, and will ease inflationary pressure over the long term.”
On Tuesday, Treasury Secretary Janet Yellen forwarded a similar argument during an interview with Marketplace host Kai Ryssdal.
“Well, I think the economy needs it, and the people need it. … It is really intended to address long-standing problems that have been holding this economy back,” she said about the president’s multitrillion-dollar spending plan. “It’s meant to boost long-term economic growth and to address inequities.”
After Yellen touted the purported benefits of universal preschool, child tax credits, new health care programs, and climate change abatements, Ryssdal noted the inflationary risks tied to federal spending. “You say this is not a short-run stimulus program. And I wonder if that’s the basis for your belief that this will not be inflationary in this economy? Because as you know, inflation is a big deal right now.”
“Well, inflation has been running at higher levels than we’ve been accustomed to seeing for a long time. And I know that really imposes a burden on households,” Yellen responded before saying that rising price levels are “a consequence of recovery from a very severe shock due to the pandemic and something that will work itself out over time.”