Asked about Republican suggestions that inflation started with his Covid relief package, Mr. Biden said he saw “Zero evidence of that.”President Biden said that the U.S. will not necessarily fall into a recession during an interview with the Associated Press, arguing the U.S. economy is well-positioned to tamp down inflation without a sustained economic contraction.
As the Federal Reserve rapidly raises interest rates in an effort to rein in high inflation, some economists have started to expect that the U.S. may fall into a recession sometime this year or next year. A recent survey of top chief executives showed 60% of them expect a recession in their geographic area in the next 12-18 months.
Mr. Biden told the AP that Americans should not heed the warnings about a recession.
“First of all, it’s not inevitable,” he said. “Secondly, we’re in a stronger position than any nation in the world to overcome this inflation.”
Inflation, which hit a four-decade high of 8.6% in May compared to a year ago, has become the Biden administration’s top economic policy priority this year as rising prices have weighed on Democrats’ political standing and their policy goals in Congress. Republicans have blamed Democrats’ $1.9 trillion rescue package passed last year for overheating the economy and pushing up
Asked about Republican suggestions that inflation started with his Covid relief package, Mr. Biden said he saw “Zero evidence of that.” He said that inflation was a global phenomenon, and Democrats have broadly emphasized the role that supply-chain disruptions and the war in Ukraine have played in increasing inflation.
Many economists, though, say that government stimulus spending during the pandemic helped fuel demand throughout the economy, and the spending is one of several factors that has raised prices. Treasury Secretary Janet Yellen has said recently the package helped feed demand, which both propelled the economy’s rapid recovery and marginally increased price increases.
Mr. Biden said he disagreed with Ms. Yellen’s view.
“She said it may have a marginal impact on it,” he said. “You could argue whether it had a marginal, minor impact on inflation. I don’t think it did. And most economists do not think it did. But the idea that it caused inflation is bizarre.”