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| https://www.terrellaftermath.com/ |
Yes, the stimulus was too big. But that’s not the main reason prices are through the roof.
. . ."That she was. In March 2021, when inflation hawks were arguing that the Biden administration’s $1.9 trillion stimulus plan was going to overheat the economy, Yellen called the risk of inflation “small” and “manageable,” and a couple of months later said, “I don’t anticipate that inflation is going to be a problem.” She wasn’t alone. For much of 2021, Federal Reserve Chair Jerome Powell said that he thought inflation would be “transitory,” and even as inflation rose above 6 percent, the Fed kept interest rates near zero. (Its first interest-rate hike was not until March 2022.)
"Along the way, that thing Yellen thought was not going to be a problem became a huge one—not least, politically. Indeed, with today’s news that inflation in May was 8.6 percent (previously at 8.3 percent), it is arguably the biggest problem that the Biden administration faces—high prices are overshadowing pretty much everything else about the U.S. economy. The unemployment rate is a mere 3.6 percent, and last week, the Labor Department announced that the U.S. had added another 390,000 jobs in May. But all anyone wants to talk about is that average gas prices are now nearing $5 a gallon.
"Yellen and Powell have, predictably, faced a barrage of criticism over their failure to keep inflation under control. When Yellen testified before Congress
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