Economics
IMF Sees Limited Inflation Risk From Biden’s $1.9 Trillion Plan
- U.S. price gauge seen unlikely to persistently surpass 2%
- Factors from globalization to automation limit price pressures
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The International Monetary Fund is weighing in on the debate over U.S. President Joe Biden’s $1.9 trillion stimulus proposal, saying that it sees only limited inflation risk, a rebuttal to some critics who worry about the American economy overheating.
The past four decades of experience suggest that any surge in U.S. price pressures is unlikely to push inflation persistently above the Federal Reserve’s 2% inflation target, IMF chief economist Gita Gopinath wrote in a blog on Friday. She noted relative stability in inflation from 2009 to 2019 even as wages rose amid a sharp drop in unemployment, and said that the headline U.S. jobless rate, now 6.3%, understates gaps in employment.