Powell: Fed pullback, Kennedy: inflation psychic hotlines, Yellen: all paid for Build Back Better

On 11/30/3031, Senator John Kennedy (R-LA) questions Treasury Sec. Janet Yellen and Fed Chair Jerome Powell at a Senate Banking Committee hearing, “I realize that no one is clairvoyant but I think it’s fair to say that the experts who have been advising you about the future rate of inflation have pretty much the same credibility as those late night psychic hotlines you see on TV. Is the Fed considering increasing the pace of its tapering?” asked Kennedy, referring to the end of the bond-buying program. “We’ve got to get control of inflation. It’s ravaging our people.”

Powell explained that the ongoing supply chain issues plaguing the nation have thrown a wrench into their projections, “So, I think what we missed about inflation was the we didn’t predict the supply side problems. And those are highly unusual and very difficult, very non-linear, and it’s really hard to predict those things,” he said. “But that’s really what we missed. And that’s why all of the professional forecasters had much lower inflation projections.”

Despite his attempt to blame high prices on supply chain backlogs — as opposed to stimulus money driving the devaluation of the dollar — Powell did admit that the overall “risk of higher inflation has increased.” “Generally, the higher prices we’re seeing are related to the supply and demand imbalances that can be traced directly back to the pandemic and the reopening of the economy,” he said. “But it’s also the case that price increases have spread much more broadly in the recent few months across the economy, and I think the risk of higher inflation has increased.”

Treasury Secretary Janet Yellen defended the Build Back Better bill: it is all paid for.