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Economists, investors concerned over inflation spike fueled by stimulus payments

WASHINGTON, DC - APRIL 29: U.S. President Donald Trump's name appears on the coronavirus economic assistance checks that were sent to citizens across the country April 29, 2020 in Washington, DC. The initial 88 million payments totaling nearly $158 billion were sent by the Treasury Department last week as most of the country remains under stay-at-home orders due to the COVID-19 pandemic. (Photo by Chip Somodevilla/Getty Images)

WASHINGTON, DC – APRIL 29: U.S. President Donald Trump’s name appears on the coronavirus economic assistance checks that were sent to citizens across the country April 29, 2020 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)

OAN Newsroom
UPDATED 8:30 AM PT – Sunday, April 11, 2021

Economists and investors voiced concerns over increased inflation that they believe was partially fueled by stimulus payments. According to reports from the Bureau of Labor Statistics, the U.S. Consumer Price Index climbed one percent on a seasonally adjusted basis in March, which was a greater rise than expected.

The highest spike was seen in gasoline prices, which jumped 8.8 percent. These concerns came after Biden’s $1.9 trillion American Rescue Plan was criticized by GOP lawmakers for the damage it would do to the economy.

WASHINGTON, DC - MARCH 11: U.S. Vice President Kamala Harris speaks at an American Rescue Plan virtual briefing in the South Court Auditorium at the White House on March 11, 2021 in Washington, DC. President Joe Biden signed the $1.9 trillion COVID-19 relief bill into law this afternoon. (Photo by Tasos Katopodis/Getty Images)

U.S. Vice President Kamala Harris speaks at an American Rescue Plan virtual briefing in the South Court Auditorium at the White House on March 11, 2021 in Washington, DC. (Photo by Tasos Katopodis/Getty Images)

 

“Now we have a situation where the economy is reopening,” Federal Reserve Chairman Jerome Powell stated. “There will be a surge in demand. Perhaps there will be bottlenecks, perhaps, but it seems unlikely that that will change the underlying inflation psychology that has taken deep roots over the course of many, many years.”

He added, he thinks there will be upward pressure on prices, which may be passed along to consumers in the form of price increases. However, Powell stated that experts believe the effects will be temporary.

Meanwhile, Wall Street executives are worried about an abrupt increase in interest rates to counteract high inflation.

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