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“A lot of ‘inflation’ is due to the strong support we have given to households”

In Monday’s edition of NPR’s “All things considered,” White House Council of Economic Advisers Chairman Cecilia Rouse said Federal Reserve Chairman Jerome Powell had looked at the data to understand the source of inflation, and “one of the things we can see is that is due in large part to the strong support we have given to households, so demand has been strong.”

Rouse said, [relevant remarks begin around 3:10] “I think President Powell is doing the right thing, which is to say he’s trying to figure out what the source of inflation is. It actively monitors the data. And one of the things we can see is that a lot of it has to do with the strong support we have given to households, so the demand has been strong. And households have shifted their demand. They buy things instead of buying services, and things go through the ports. They have to be built, causing bottlenecks in the supply chain. So Jerome Powell – President Powell keeps tabs on this data, understands what the Fed’s potential is to address it. We know President Biden has an aggressive program to increase port capacity. So, that is, it monitors the data. And he – they’ve already signaled that they’re going to start canceling their support to the financial sector, and they’ve also signaled their willingness to raise interest rates when it becomes appropriate.

Follow Ian Hanchett on Twitter @IanHanchett



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