UPDATED 8:30 AM PT – Sunday, April 11, 2021
Economists and investors voiced concerns over increased inflation that they believe was partially fueled by stimulus payments. According to reports from the Bureau of Labor Statistics, the U.S. Consumer Price Index climbed one percent on a seasonally adjusted basis in March, which was a greater rise than expected.
The highest spike was seen in gasoline prices, which jumped 8.8 percent. These concerns came after Biden’s $1.9 trillion American Rescue Plan was criticized by GOP lawmakers for the damage it would do to the economy.
“Now we have a situation where the economy is reopening,” Federal Reserve Chairman Jerome Powell stated. “There will be a surge in demand. Perhaps there will be bottlenecks, perhaps, but it seems unlikely that that will change the underlying inflation psychology that has taken deep roots over the course of many, many years.”
He added, he thinks there will be upward pressure on prices, which may be passed along to consumers in the form of price increases. However, Powell stated that experts believe the effects will be temporary.
Meanwhile, Wall Street executives are worried about an abrupt increase in interest rates to counteract high inflation.