WH Economic Adviser Deese sees reason to think that factors boosting inflation will moderate over time
|Following the White House (WH) expectations of an upbeat inflation figure on YoY, Reuters conveyed comments from WH Economic Adviser Brian Deese from an online event hosted by the Council on Foreign Relations.
The diplomat’s initial statement was, “Reaching agreement with the U.S. Congress on a package of climate and social spending will be a challenge, but the Biden administration remains upbeat it can be done.”
Additional comments
US seeing strong labor market recovery, about 60% of decline due to pandemic has been recovered.
Sees opportunity to make 'lot of progress' on returning those not in labor force due to family care obligations.
Biden administration remains optimistic about getting 'something meaningful done' with congress on climate, social spending package.
If the proposals were fully paid for, as intended by the Biden administration, the spending package would not have a net impact on aggregate demand or inflation.
FX implications
The news tried to placate inflation fears but the pre-CPI mood in the market weighed on risk barometers like AUD/USD during the early hours of Thursday’s Asian session.
That said, the Aussie pair pauses three-day uptrend around 0.7180 by the press time.
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