JFI's Claudia Sahm provides insights on macroeconomic and Fed trends

As debates over the Biden Administration’s Build Back Better plan continue to unfold, JFI Senior Fellow Claudia Sahm captures trends in U.S. macroeconomic policy and addresses fears of inflation attributed to robust fiscal policy:

Speaking with Vox’s Emily Stewart, Sahm gives a nuanced picture of rising prices amid broader policies of economic relief for most families, such as the stimulus checks and expanded Child Tax Credit:

“Both because jobs have been coming back and also because the federal government put out a lot of economic relief, people — especially those who are not at the very top of the heap — have, on average, enough money to pay those extra prices in the majority of cases.”

Read the full Vox interview here and thank you to Emily Stewart for her reporting.

In an opinion essay for The Washington Post, Sahm argues that expanded Child Tax Credit has made dramatic impacts on poverty and deep poverty in particular, with little evidence of dramatic work disincentives. Her piece addresses key ways the Build Back Better plan can continue to serve as a “lifeline” for many families while serving as a continued economic stimulus. From the piece:

“Some economists predict that without a minimum income requirement parents will work less. Some go so far as to claim that parents in deep poverty will work less if the credit is extended, choosing to stay in deep poverty. But this analysis approaches the question backward.”

On the Bloomberg Surveillance Podcast, Sahm describes “a new Federal Reserve framework that is being tested as we speak.” Listen to the interview on wider market trends here.

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