Treasury Secretary Janet Yellen said U.S. inflation risks remain subdued as the Biden administration pumps $1.9 trillion in pandemic relief into the economy and a return to full employment comes into view. “Is there a risk of inflation? I think there’s a small risk and I think it’s manageable,” Yellen said on ABC’s “This Week” on Sunday. Some prices that fell last year when the Covid-19 pandemic spread across the U.S. will recover, “but that’s a temporary movement in prices,” she said.
As attention turns next to President Joe Biden’s pledges to boost infrastructure spending, Yellen said “we haven’t decided yet” whether to pursue the kind of wealth tax supported by a number of progressive senators led by Elizabeth Warren and Bernie Sanders.
Campaign pledges made by Biden, including higher tax rates on corporations, capital gains and dividend payments, “are similar in their impact to a wealth tax,” Yellen said.
Yellen and other officials insist the aid – which comes on top of pandemic relief passed by Congress last year — is badly needed for an economy slammed by Covid-19, particularly low-income workers heavily represented in service industries.