The Federal Reserve’s vice chair, Richard H. Clarida, pushed back on concerns raised by two prominent economists — Lawrence H. Summers, the former Treasury secretary, and Olivier J. Blanchard, former chief economist at the International Monetary Fund — that big government spending risks of out-of-control inflation. “They have both correctly pointed out that the U.S. has a lot of fiscal support this year,” Mr. Clarida said, speaking on an Institute of International Finance webcast. He also pointed out that while there is pent-up demand on the part of spenders, there is also pent-up supply, because the service sector has been shut for months on end. “At the Fed we get paid to be attentive and attuned to inflation risks, and we will be,” he said. But he noted that forecasters don’t see “undesirable upward pressure” on inflation over time.

Source: International New York Times March 25, 2021 15:56 UTC