White House sticks by Biden's $4T spending plans despite Dimon warning on inflation
Congress has already approved about $6 trillion in coronavirus relief measures
The White House on Wednesday defended President Biden's sweeping $4 trillion spending plans, despite a warning from JPMorgan Chase CEO Jamie Dimon that the unprecedented levels of government stimulus could lead to runaway economic growth.
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While testifying before the Senate Banking Committee, Dimon – who leads the nation's largest bank by assets – raised concerns over potential U.S. inflation and suggested the Federal Reserve may need to raise interest rates sooner than expected to tamp down rising prices. Dimon said he expects inflation to climb "considerably higher" than 1.6%, thanks to massive amounts of federal spending and easy monetary policies.
Congress has already approved about $6 trillion in coronavirus relief measures, including $4 trillion under former President Donald Trump, pushing the nation's debt to record-high levels.
The figure is poised to hit at least $30 trillion this year. Biden is now plowing ahead with passing his "Build Back Better" agenda, comprised of the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan. The measures would dramatically reshape the government-funded social safety net and rebuild the nation's crumbling infrastructure.
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"If that money is wasted, it is not productively spent, we will have more inflation, less productivity, slower growth and the American democracy you will have lost even more credibility eyes in the world," Dimon said.
Asked about Dimon's comments during the Wednesday press briefing, Karine Jean-Pierre, the White House principal deputy press secretary, defended Biden's spending proposals and pushed back against concerns they could spur inflation.
"The president's plans are working," she told Fox News' Peter Doocy.
Jean-Pierre noted that Biden oversaw the stimulus recovery package in 2009 when he was vice president.
"This is a president who understands about making sure that we're not wasteful," she said. "He made sure there was no corruption and no waste. And so he understands how this all works."
The Labor Department reported earlier this month that U.S. consumer prices for goods and services surged 0.8% in April, the largest monthly increase in more than a decade and the fastest year-over-year jump since 2008. Excluding the volatile food and energy data, core inflation rose 0.9% in April and 3% over the past 12 months.
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Republican lawmakers have seized onto swiftly rising prices, as well as lackluster job creation in April, to argue that more government funding will only hurt the economy as it recovers from the coronavirus pandemic.
The Federal Reserve, led by Chairman Jerome Powell, has held interest rates near zero since March 2020 and has repeatedly indicated it will do so until "labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time." Powell has stressed that he sees no signs of persistent inflation.