White House Economic Advisor: "US Inflation Due to Pandemic... Not Biden's Stimulus Plan"

"The real cause of inflation was the global pandemic." A member of the U.S. White House Council of Economic Advisers (CEA) argued that the inflation in the United States, which reached its highest level in decades, was due to the COVID-19 pandemic rather than President Joe Biden's stimulus measures.

[Image source=Reuters Yonhap News]

On the 10th (local time), economic media CNBC reported that Heather Boushey, a member of the CEA, stated this in an interview held at the Aix-en-Provence Economic Forum in France last weekend. At this event, Boushey publicly refuted claims that the so-called "Bidenomics" economic policies and the excessive stimulus measures immediately following the pandemic fueled inflation in the U.S.

Boushey said, "The first thing the President did upon taking office was to enact the American Rescue Plan right in the middle of the pandemic," adding, "We implemented policies that provided enough flexibility to address all the challenges we faced." This $1.9 trillion stimulus package was announced in January 2021 and passed Congress in March of the same year.

Boushey emphasized, "If, despite our actions, U.S. inflation had surged higher than in other countries, one might argue that the policy was to blame. But the reality was not so." He continued, "It is true that inflation occurred in the U.S., but other countries that did not implement the same policies experienced it as well," and raised his voice, saying, "Therefore, the real cause of inflation is the global pandemic." He also added, "This is about the resilience of global supply chains."

In particular, Boushey explained that this is why the Biden administration is making efforts to attract investment to the U.S. He said, "Friends and allies around the world are cooperating with us to encourage expanding the supply chain resilience we need," and "They are also urging a transition from fossil fuels, which have high price volatility, to clean energy." According to Boushey, the latter scenario increases price stability over time, allowing the global economy to avoid some of the issues that affect domestic prices.

According to the Department of Labor, U.S. inflation entered the 4% annual rate range in May, marking the lowest increase in about two years. In mid-last year, U.S. inflation exceeded 9%, reaching the highest level in about 40 years. Experts cited supply chain issues, excessive demand for goods, and trillions of dollars in COVID-19 fiscal stimulus as triggers for inflation. Earlier, President Biden's approval rating fell to a historic low amid rising American dissatisfaction with inflation and gasoline prices.

Regarding this, Boushey reiterated that U.S. inflation has been slowing recently. He said, "It has been slowing for 11 consecutive months," and "The U.S. has shown stronger growth than other major G7 countries but has not seen higher inflation."

Meanwhile, on June 12-13, inflation indicators for June, including the U.S. Consumer Price Index (CPI) and Producer Price Index (PPI), will be released. Especially since last week's ADP private employment report and the Department of Labor's employment report gave mixed signals about the labor market, market attention is highly focused on the CPI. Wall Street expects the U.S. June CPI to rise 0.3% month-over-month and 3.1% year-over-year, showing a slowing trend.

This content was produced with the assistance of AI translation services.