WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen on Sunday downplayed fears that the budget spending plans launched by the Biden administration would encourage a return to inflation by explaining that planned spending would be spread over a decade .
“It will be spread almost evenly over eight to ten years,” she said in an interview on NBC’s “Meet the Press” show.
She added that the Federal Reserve – which she led between 2014 and 2018 – would carefully monitor price developments and have the instruments to contain them when needed.
“I don’t think inflation will be a problem but if it becomes a problem, we have the tools to deal with it. These are historic investments, which we need to make our economy productive and equal,” said she declared.
The projects presented in recent months by Joe Biden must be financed by tax measures affecting on the one hand the richest Americans, ie less than 1% of the total population, and on the other hand companies.
Some Democrats have expressed fear that these tax measures will dampen the growth of the economy.
Janet Yellen has not commented on the possibility that Joe Biden will accept an alternative text drawn up by Congress that does not provide the means to finance the new expenses foreseen by his projects.
“He made it clear that he thought a permanent increase in spending should be funded and I agree,” she said.
(Doina Chiacu and David Lawder; French version Marc Angrand)
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