US Federal Reserve (Fed) Governor Jerome Powell and US Treasury Secretary Janet Yellen attended the session on the Coronavirus Aid, Support and Economic Security Act (CARES) at the House of Representatives Financial Services Committee.
Pointing out that they expect inflation to rise this year due to the base effect, Powell said that as economic activity returns to normal, there may be an increase in spending and some upward pressure on prices may be seen.
Powell, “Our best view is that the impact on inflation will neither be large nor permanent.” said.
Underlining their strong commitment to the price stability target, Powell reiterated that the Fed will use its tools appropriately.
“WE HOPE TO EVALUATE THE CHANGES IN THE TAX POLICY”
US Treasury Secretary Yellen also stated that he believes that growth will be achieved with the transition of the economic support package, “I think we will see a return to full employment next year.” said.
Yellen stated that the pace and strength of recovery will depend on how the economic support package is implemented.
Expressing that they hope to evaluate changes in tax policy, Yellen expressed that the tax policy change will help finance infrastructure programs.
Yellen said, “We need to increase revenues fairly to support the expenditures needed for the economy to be competitive and productive.” he spoke.
Underlining that the Biden administration will not recommend policies that will harm small businesses, Yellen explained that they will focus on investments that have long been needed for the economy to be competitive and productive.