On Thursday's broadcast of CNN's "At This Hour," White House Council of Economic Advisers member Heather Boushey stated that she can't give "a clear answer" on how long price increases have to last before inflation isn't seen as temporary because "everything in the economy hinges on how well we wrap our hands around this pandemic." And we don't know when everyone will get vaccinated and we can control variants of the coronavirus.
Host Kate Bolduan asked, "How long do these spikes have to last before this isn't seen as temporary and thus a much bigger problem?"
Boushey responded, "Inflation is certainly an important issue, and it's one that we talk about all the time and that we are certainly watching. But at this point, what we are seeing in terms of price gains has to do with our recovery from this historic pandemic. It was much more difficult to turn the economy on than it was to turn it off back in the spring of 2020. And as we've done so, we've seen these supply chain hiccups. We've seen these challenges across the economy that have led to some price increases. And so, yes, we are seeing this. But of course, last month, the largest share of price increases was in cars…and another significant chunk was in pandemic-related services. So, we think that, as we work our way out of this pandemic, as these supply chain hiccups get resolved, that we will see prices come back down to normal."
Bolduan then asked, "[W]hat is your definition of temporary when it comes to inflation right now?"
Boushey answered, "Well, everything in the economy hinges on how well we wrap our hands around this pandemic. And so, as we're watching what is happening with these variants, with Delta and other variants potentially coming down the pipeline, that is the real question. So, can we get everyone vaccinated, can we get back to normal in terms of our human engagement? These are the questions that are behind what is happening with inflation."
Bolduan then asked, "But you don't have internally, or at least you don't want to say publicly, where — how many months out it starts becoming less of a debate?"
Boushey responded, "If I could tell you exactly when every American would get the vaccine and exactly how quickly — and we'll be able to control Delta and other variants, then I'd be able to give you a clear answer. But the reality is is that the economic crisis was due to the pandemic. And so, we need to be — have patience as we work our way out of that."
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