On Tuesday’s broadcast of CNN’s “Early Start,” Professor of Economics at Harvard University and former International Monetary Fund Chief Economist Ken Rogoff said that inflation has fallen due to the Federal Reserve, not due to actions of the Biden administration and “a lot of Bidenomics is really addressed at things like trying to prevent climate change, trying to redistribute income more effectively,” but it’s not clear it’s helping the economy that much.
Host Christine Romans asked, “[T]here was this research note from Morgan Stanley, where they forecast 1.9% growth for the first half of this year. That’s quadruple what they had thought before and they pointed to infrastructure investments and Bidenomics, the President’s economic policies. How much do White House policies have to do with the resilience we’re seeing in the economy right now?”
Rogoff responded, “I think it’s hard to say. A lot of the policies are really geared towards coming years and not so much falling now. I really give the White House an A+ for not leaning on the Fed to stop raising interest rates. If you want to know why inflation’s coming down, and that’s really the thing that’s calming people, is that they stood back and let the Federal Reserve take over. If things go south, of course, they may feel differently. I think a lot of Bidenomics is really addressed at things like trying to prevent climate change, trying to redistribute income more effectively, but I’m not sure so much they’re stimulus. Although, I will grant that lot of money’s been coming from Europe that they were spending on investment in Europe, they’re now spending in the U.S., particularly because of the so-called Inflation Reduction Act. The Europeans are mad about that and they may counter and then that lift to our economy may go away.”
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