W.H. Council of Economic Advisers Chair: ‘A Lot’ of Inflation ‘Is Due to the Strong Support We Gave to Households’

On Monday’s edition of NPR’s “All Things Considered,” White House Council of Economic Advisers Chair Cecilia Rouse stated that Federal Reserve Chair Jerome Powell has been looking at data to understand the source of inflation, and “one of the things that we can see is a lot of it is due to the strong support we gave to households, so demand has been strong.”

Rouse said, [relevant remarks begin around 3:10] “I think Chair Powell is doing the right thing, which is he’s trying to understand what is the source of inflation. He’s actively monitoring the data. And one of the things that we can see is a lot of it is due to the strong support we gave to households, so demand has been strong. And households have shifted their demand. They’re buying in things instead of buying services and things go through ports. They have to be built, and that is causing the bottlenecks in the supply chain. So, Jerome Powell — Chair Powell is keeping his eye on those data, understands what the potential of the Fed is in potentially addressing that. We know that President Biden has got an aggressive agenda to increase capacity at the ports. So, this is to say that he is watching the data. And he — they’ve already signaled they’re going to start unwinding their support in the financial sector, and they’ve also signaled their willingness to increase interest rates when that becomes appropriate.”

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