White House press secretary Jen Psaki addressed inflation at Wednesday's press briefing with reporters. Psaki said the increase in prices of common goods is due to "transitory effects" of the economy "turning back on."
Q Great. Thanks, Jen. Two quick subjects. First, with today’s consumer prices report and President Biden’s pending choice about leadership at the Federal Reserve, how patient is this administration with inflation consistently running above the Fed’s 2 percent target?
MS. PSAKI: Well, as you know, Josh, from following this closely, we obviously defer to the Federal Reserve and their projections and official targets, which they make regularly.
I would note that we’ve seen a decrease over the course of time, and that is still evident, if you look month to month, with the data that came out this morning. So, between the second quarter and third quarter of this year, monthly inflation increases have actually decelerated by 50 percent. And just to give you more specific data points, it was around 0.8 percent, and then it went down 0.4 percent. Hence, 50 percent.
So, we think this decrease reflects the view of the Federal Reserve continues to be — and many Wall Street forecasters, which continue to predict — project that inflation is expected to continue to decelerate in 2022 and beyond, as we come out of the pandemic.
So, it’s not about patience to us. We certainly understood and knew that when we were coming in — when the President was coming into office, and he was coming in at a time where we needed to turn the economy back on, where he was coming in at a time where unemployment was high, where wages were down, demand was down — which, as you know, you have — once you build up — when demand increases that can re- — result in an increase in prices — that, over time, as the economy’s turning back on, we’d see some of these transitory effects.
That’s what we — that’s what’s been predicted. That’s what we are — have been planning for. And, of course, next year, we expect it to come down as outside forecasters are projecting.