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White House defends trillion-dollar stimulus while Jamie Dimon and Larry Summers warn of runaway inflation – economics bitcoin news

On Wednesday, the White House defended President Joe Biden’s trillion-dollar spending proposal despite criticism of rising inflation and low interest rates. Inflation in the US has risen to unprecedented levels and the purchasing power of the average American is becoming less powerful. Now critics such as JPMorgan Chase CEO Jamie Dimon and US economist Larry Summers have criticized the Biden administration because they expected inflation to be “substantially higher”.

Americans see purchasing power sink while analysts suspect even more inflation on the horizon

Inflation has become one Concern for american citizens Ever since the US government and the Federal Reserve decided to increase it M1 Monetary Supply Like never before in history. Essentially, inflation is an increase in the price of goods and services, and the country’s currency ends up buying fewer goods and services.

Reports suggest that the value of almost everything is increasing, and that the US dollar can buy much less than before. Car prices are Be expected To go through the roof this year, food prices have Grew up astronomical And touched the prices of pork Seven year high. The USDA expects the price of food to increase from 2.5% to 3.5% for the year. It is quite clear that central banks and politicians often cite “2% inflation rate” is a myth, As the 2021 figures show that the prices of goods and services have increased in the US.

Despite some disapproval and inflation concerns, the Biden administration is defending its proposed $ 2.3 trillion American jobs plan and the $ 1.8 trillion American family plan. Increased its 2021 inflation forecast Wednesday for the Personal Consumption Expenditure Price Index. “We expect 2021 core inflation to be 2.5%,” the forecast notes.

“For 2022-25, our forecast is essentially unchanged; We expect an average core inflation of 2.3%, well above the Federal Reserve’s 2% long-term target, “the inflation report said. Meanwhile, on May 26, financial officials and economists asked the Federal Reserve Biden has criticized the administration for demanding even more funding.

“You’re talking about unprecedented sustained financial and monetary policy, like autopilot,” JPMorgan Chase CEO Jamie Dimon explained at a Senate hearing on Wednesday. “[There is] There is nothing wrong with 1.6%, “Dimon said.” I expect it to be much higher than that. Hopefully, it will not be awkward and the Federal Reserve will be able to reduce it. But we always plan for worse things than that. “

JPMorgan Chase CEO Jamie Dimon Spoke about inflation When he testified before the Senate Banking Committee held on 25 May. While a large number of financial institutions and Wall Street CEO CEO Argued against On that day “Awakened Capitalism” and “Climate Change”, Dimon talked about inflation.

The CEO of JP Morgan Chase, which manages the largest financial institution by wealth, said the government’s incentives could be taken away. “If that money is wasted, it is not spent productively, then we will have more inflation, lower productivity, slower growth and American democracy you will lose even more credibility.” [in the] Eyes of the world, ”asserted Dimon.

Despite Jamie Dimon’s remarks, White House chief deputy press secretary, Carine Jean-Pierre, stressed to the press that “the president’s plans are working.”

“It’s a president who understands how to make sure we’re not worthless,” she said. “He ensured that there is no corruption and waste. And so he understands how it all works. “

Larry Summers: ‘The Fed’s Will only removes the punchbowl when it sees some people drunkenly’

Not everyone agrees with the Karine Jean-Pierre and Biden administration. Former Clinton and Obama officials, Larry Summers at Coindesk 2021 Consensus Conference Discussion on fugitive inflation And monetary easing policies as well.

“I think [the] The policy is overdoing it instead, ”Summers said on Wednesday. “The feeling of peace and decency being offered by economic policy makers, that this is all that can be easily managed, is wrong.”

Former vice president of development economics and chief economist of the World Bank, former Treasury Department official of the Clinton administration, Larry Summers, former director of the National Economic Council for the Obama Administration, warned the Biden team of rising inflation. As far as inflation forecasts are concerned, Summers said there is “extreme uncertainty” at the consensus conference this week.

“Joe Biden has a historic opportunity to become a great president,” Summers further commented. “But I think they should learn the lesson of the Johnson administration’s errors that elected Richard Nixon and the Carter administration’s errors that chose Ronald Reagan.”

Summer’s statement came to an end when he said:

The Fed used to think that before the party was good, it removed the Punch Bowl. Now, the Fed’s theory is that it will remove the Punch Bowl only after seeing some people drunkenly moving around. We are printing money, we are making government bonds, we are borrowing on unprecedented scale. Those are the things that certainly pose a greater risk of a sharp decline in the dollar than before. And the sharp decline of the dollar has historically been more likely to convert itself into inflation.

Despite clear data and criticism, the White House disagrees, America will see ‘long-term inflation’ and this is the Fed’s work ‘first and foremost’

In recent times, when inflation has gripped the US economy, US Dollar Index (DXY) Falling below 90, weakening again. Seven days ago US Dollar Dropped to a three-year low And economists think that the dollar may depreciate by 10%. While there are a lot of figures and figures that show the dollar is weak and inflation is disorganizing the economy, the White House completely disagrees.

In response to Larry Summers’ recent criticism of Biden economics, a White House official responded and told CNN that it “does not see signs of persistent dislocation or long-term inflation.”

The official said that it monitors inflation rates but it is more in the hands of the US central bank. The White House official concluded, “Our team closely monitors inflationary pressures but inflation is first and foremost within the scope of the Federal Reserve.”

What do you think about Biden’s economic plan and the American economy anticipating runaway inflation? Tell us what you think about this topic in the comments section below.

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