UPDATED 1:50 PM PT – Sunday, February 7, 2021
In an interview on Sunday, Treasury Secretary Janet Yellen dismissed the warnings that U.S. inflation could spike out of control if Joe Biden’s $1.9 trillion stimulus bill goes into effect.
This came after economists pointed out a broad fiscal stimulus combined with the federal reserve’s ultra-low interest rates may lead to asset bubbles and double-digit inflation.
Yellen claimed the benefits of short-term relief outweighed the long-term structural risks to economic stability.
The President is absolutely right: The benefits of acting now — and acting big — will far outweigh the costs in the long run. https://t.co/0EX2grKELw
— Janet Yellen (@JanetYellen) January 31, 2021
“My predecessor, you know, has indicated that there’s a chance this will cause inflation to rise, and that’s also a risk we have to consider,” Yellen stated. “I’ve spent many years studying inflation and worrying about inflation, and I can tell you we have the tools to face that risk if it materializes.”
Yellen also said the Biden Cabinet is planning to enforce the stimulus package regardless of inflation risks or the opposition by Republicans.