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© Reuters. File photo: A general view of the sun rising behind the White House in Washington, USA on January 22, 2021.Reuters/Jonathan Ernst
Andrea Salal
WASHINGTON (Reuters)-A senior official said on Tuesday that after the largest increase in the consumer price index in June, the White House expects supply chain pressures to subside in the “not too distant future”, but could not determine when. Within 13 years.
The official declined to repeat earlier predictions that inflation will peak in the summer, citing uncertainty about when supply chain pressures will ease and concerns about the emergence of new COVID-19 variants.
When asked whether the price increase of certain services reflects any price fraud, the official said, “This may remain to be seen,” adding that this is a question worth investigating.
Due to supply constraints and as the economic recovery strengthened, the cost of travel-related services continued to rebound from the level of pandemic suppression, and the US consumer price index rose 0.9% in June.
The CPI rose by 0.6% in May.
White House officials still believe that the price increase is temporary, citing easing pressure in the semiconductor market and falling timber prices-these two factors have caused bottlenecks and pushed up prices.
They cited recent upward revisions in overall growth forecasts and stated that President Joe Biden’s COVID-19 rescue plan has effectively promoted a stronger-than-expected recovery, but it also shows that people are increasingly worried about new COVID-19 variants and vaccination rates. Disparity.
An official said: “We expect these things to resolve on their own in the near future, but I can’t say the exact time.” “Neither can we say whether we really have controlled the epidemic.”
The official was asked to determine a timetable for when inflationary pressures will ease. He said: “We are just watching the data closely, weekly and monthly.
Kevin Brady, the top Republican on the House Ways and Means Committee, said Biden’s policies are pushing up prices.
He said in a statement: “Because consumer prices are at a 13-year high, Biden’s inflation rate has exceeded wages, erasing workers’ wage growth and leaving American families behind.”
At the same time, former U.S. Treasury Secretary Lawrence Summers met with Biden’s senior economic adviser Brian Des and Cecilia Routh on Tuesday. He is an economist allied with the Democratic Party and criticized the White House’s current situation. Policy may trigger inflation. His criticism angered White House officials, who insisted that the current price spike is temporary.
Although Summers was critical of Biden’s initial stimulus plan, he has always supported spending on “green” infrastructure.
A White House official said: “They talked about the importance of the infrastructure package and the adoption of the president’s complete reconstruction plan agenda.”
Summers declined to comment.
potential problems
Treasury bond yields rose on Tuesday, indicating that investors may begin to demand increased compensation for the risk of rising prices.
The government official said that about 60% of the price increase in June was due to used and new cars and auto parts. Excluding automobiles and pandemic-related services, prices rose only 0.2%.
The official said that the government is carefully studying the industries that drive price increases, adding that part of the increase reflects the low level of prices during the pandemic.
Another official said that people’s concerns about the auto market continue, but the Biden administration maintains close contact with dealers, manufacturers, semiconductor suppliers, etc., and firmly believes that current pressure will be reduced.
One of the officials said that the White House does not expect the sharp increase in used car prices to continue beyond this year.
The official said that some potential problems in the US economy—including severe housing shortages and high drug prices—will remain a problem.
The official said that Biden’s proposed budget includes $213 billion in funding for affordable housing to solve some of the problems, and the executive order he signed on Friday should cause the prices of medicines and hearing aids to fall.
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