The Press Secretary’s statement suggests the White House still believes inflation is temporary.
The Department of Labor’s report that consumer prices are up 8.5%, a four-decade high, led to Psaki being asked about the Biden administration’s previous claims that inflation wouldn’t last.
Psaki insisted, “That is the view of the Federal Reserve and outside economists, and they all continue to project it will come down this year.”
However, toward the end of 2021, officials had already begun changing their tune. Treasury Secretary Janet Yellen said in December that it was time “to retire the word transitory”.
Federal Reserve Chair Jerome H. Powell was asked whether he stood by earlier testimony that price increases are not large or persistent. He answered, “No, that is no longer my view.”
An economist at the University of Arkansas had a slightly more optimistic take. Mervin Jebaraj says he thinks “inflation is going to be with us for awhile” but doesn’t expect to see a recession this year, at least.