FOMC Chairman Powell answers a reporter’s question at the press conference. September 26, 2018. Photo courtesy of the Federal Reserve.
Former chairman of the White House Council of Economic Advisors, Kevin Hassett, responded to James Freeman of the WSJ by email on how the fed’s shoveling cash to consumers is making life more difficult for producers:
(T)he Biden Administration is providing the biggest positive stimulus to demand since WWII, and at the same time doing everything it can to suppress supply. Higher [unemployment insurance] benefits, closed schools (which keep one parent at home), and promised corporate tax hikes practically guarantee that supply cannot keep up with demand.
It is a recipe for an inflation shock we have not seen in the U.S. in a generation.
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