See What The Former White House Economist Warns

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Contributor, Benzinga
February 15, 2022

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While the Biden administration is optimistic about curbing the highest inflation in nearly 40 years, former white house economist Jason Furman echoed what most Americans are thinking: “I expect inflation to remain very elevated in 2022.”

The White House staff want the public to believe the economy will improve as the supply chain issues are fixed, with President Biden saying “We are finally building an American economy for the 21st century, with the fastest economic growth in nearly four decades, along with the greatest year of job growth in American history.”

Kate Bedingfield, the White House communications director, said, “Every economic indicator shows an economy that is growing, that is stronger, that is creating jobs, that is putting more money in people’s pockets, and that is in part a result of President Biden’s economic agenda.”

And Jared Bernstein, the current White House economic adviser, said that the results of the Building Back Better program will “ease long-term inflationary pressures.”

But Jason Furman, a former chairman of President Obama’s Council of Economic Advisers, doesn’t believe completely that inflation is so easy to curb. Furman said, “I think the Fed has been a little behind the curve, and they are going to be tested next year.”

Moreover, he wrote that most economists were way off the mark about inflation. None of the 18 members of the Federal Open Market Committee, responsible for setting interest rates, expected inflation above 2.5%. As a result, inflation is out of control.

And to counter the inflationary crisis, the Fed is prepared to raise interest rates further than expected. Jerome Powell said, “if we have to raise interest rates more over time, we will.” And JP Morgan’s top executive, Jamie Dimon, expects the Fed could hike up interest rates by six to seven times.

But according to a recent Gallup Poll, Americans are bracing for continued high inflation, with nearly 8 in 10 Americans expecting inflation to remain higher. In fact, the number of Americans expecting elevated inflation is the highest Gallup number measured, beating the prediction in 2007, when only 6 in 10 Americans expect inflation to increase.  For the average American, an interest rate increase means less disposable income to put into the economy. 

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