Representative Barry Loudermilk (R-GA-11) this week reminded Federal Reserve Chair Jerome Powell about Loudermilk’s warnings from one year ago about inflation — a prediction that proved correct.
Loudermilk discussed the matter at a U.S. House Committee on Financial Services hearing.
“Our dollar has decreased in value due to inflation. A year ago, when you testified before this committee, I asked what your outlook was for the economy. You said you expected economic growth to be strong for the rest of 2021, but at that time I warned that the $2 trillion stimulus bill that was making its way through Congress at that time was unnecessary and far too big given the economy was already recovering. Lo and behold, these predictions came true,” Loudermilk said.
“But I also recall throughout 2021 we heard that inflation was sliding and would be temporary, but I also understand that that prediction probably didn’t include the actions and the roles that Congress had as you had said. According to a report from the Federal Reserve Bank of San Francisco, because the American Rescue Plan was so extremely large and was passed when the economy was already recovering this was a significant contributing factor to inflation. Do you agree with that report that our reckless spending is a contributing factor to our inflation?”
Powell said he would not comment on any one law.
“All of the things we did during the pandemic returned our dials,” Powell said.
“The economy benefited from that. We have the strongest economy in the world now, but no doubt part of what we did — without naming any particular laws — is also part of the reason why inflation is high.”
Loudermilk then asked Powell if he expected inflation to pass or remain permanent.
Powell said he and members of his agency are “humble about the fact that we can’t call the turn.”