|Reuters: EXCLUSIVE Rating agencies say Biden’s spending plans will not add to inflationary pressure
By Kanishka Singh
November 17, 2021
U.S. President Joe Biden’s infrastructure and social spending legislation will not add to inflationary pressures in the U.S. economy, economists and analysts in leading rating agencies told Reuters on Tuesday.
The two pieces of legislation “should not have any real material impact on inflation”, William Foster, vice president and senior credit officer (Sovereign Risk) at Moody’s Investors Service, told Reuters.
“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,” said Mark Zandi, chief economist at Moody’s Analytics, which operates independently from the parent company’s ratings business.
Zandi said the costs of both the infrastructure and social spending legislation were sustainable.
“The bills are largely paid for through higher taxes on multinational corporations and well-to-do households, and more than paid for if the benefit of the added growth and the resulting impact on the government’s fiscal situation are considered”, he said in an interview.
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