The Biden administration still firmly believes the United States is not headed toward a "sustained pick-up" in inflation. Treasury Secretary Janet Yellen is closely monitoring the situation and hasn't found any surprising data that's cause for panic. But, with prices likely to continue to rise in the near future, it might become more difficult for the White House to convince Americans that that's the case, Bloomberg reports.
"We still have a weird six months ahead," Josh Bivens, the director of research at the left-leaning Economic Policy Institute, told Bloomberg. "It will be a real challenge for the administration and the [Federal Reserve} to stay firm on their stance."
Indeed, there's reportedly some concern within the administration about political fallout, even if inflation is ultimately temporary, as Biden's economics team believes. One of the most consequential risks is how a potential "inflationary psychology" — in other words, anxious consumers — will affect support for Biden's major spending proposals, which could total around $4 trillion, an unnamed "ally" of the president told Bloomberg. Read more about how the Biden administration is responding to inflation fears at Bloomberg.