Economy

Top analysts say Biden infrastructure, social spending plans won’t add to inflationary pressure: report

Analysts and economists in the nation’s top rating agencies say President Biden’s infrastructure and social spending plans will not add inflationary pressure to the U.S. economy, according to a report by Reuters.

Both spending bills “should not have any real material impact on inflation,” William Foster, a vice president at Moody’s Investors Service, told the news service.

“The bills do not add to inflation pressures, as the policies help to lift long-term economic growth via stronger productivity and labor force growth, and thus take the edge off of inflation,” Mark Zandi, the chief economist at Moody’s Analytics, said, according Reuters, adding that the bills are paid for largely by higher taxes on multinational corporations and wealthy households. 

And Charles Seville, senior director at Fitch Ratings, said that both bills “will neither boost nor quell inflation much in the short-run,” reports Reuters

West Virginia Sen. Joe Manchin, a centrist Democrat, has raised concerns that inflation could be worsened by spending in the Biden plans. 

The White House has said that the “Build Back Better” plan would inject an additional $1.75 trillion into the economy and it would lower inflation, but Manchin has remained skeptical. 

“I really haven’t heard any specifics on that one,” he said on Tuesday. “They say it’s going to lower [inflation]? I’ll have to check on that one.” 

The $1 trillion bipartisan infrastructure bill was signed into law on Monday as attention now shifts to the next piece of Biden’s domestic agenda: his $1.75 trillion Build Back Better plan.

Tags Biden infrastructure bill Biden infrastructure plan Build Back Better Act Build Back Better plan Inflation Joe Biden Joe Manchin Joe Manchin Moody's Analytics Presidency of Joe Biden Reuters Washington D.C.

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File - A Chevrolet Bolt is displayed at the Philadelphia Auto Show, Jan. 27, 2023, in Philadelphia. Electric vehicles are far less reliable than gasoline-powered cars, trucks and SUVs, mainly because most automakers are still learning how to build a completely new power system, according to this year's auto reliability survey by Consumer Reports.(AP Photo/Matt Rourke, File)
File - A Chevrolet Bolt is displayed at the Philadelphia Auto Show, Jan. 27, 2023, in Philadelphia. Electric vehicles are far less reliable than gasoline-powered cars, trucks and SUVs, mainly because most automakers are still learning how to build a completely new power system, according to this year's auto reliability survey by Consumer Reports.(AP Photo/Matt Rourke, File)

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In this photo released by the Governor of Sevastopol, Mikhail Razvozhayev telegram channel, a rescuer gestures as he helps people during an evacuation after storm and flooding in Sevastopol, Crimea, Monday, Nov. 27, 2023. A storm in the Black Sea took down power grids and left almost half a million people without power after it flooded roads, ripped up trees and damaged buildings in Crimea, Russian state news agency Tass said. (Governor of Sevastopol Mikhail Razvozhayev's telegram channel via AP)
In this photo released by the Governor of Sevastopol, Mikhail Razvozhayev telegram channel, a rescuer gestures as he helps people during an evacuation after storm and flooding in Sevastopol, Crimea, Monday, Nov. 27, 2023. A storm in the Black Sea took down power grids and left almost half a million people without power after it flooded roads, ripped up trees and damaged buildings in Crimea, Russian state news agency Tass said. (Governor of Sevastopol Mikhail Razvozhayev's telegram channel via AP)

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