MNI BRIEF: White House's Brainard Sees US Inflation Cooling
U.S. inflation will continue to cool to the Fed's 2% target while a rebound in productivity bodes well for the growth potential of the economy, Lael Brainard, director of the White House National Economic Council, said Thursday.
"I do expect inflation will continue to decline and get to its pre-pandemic benchmark. We’ve already seen that with PCE for the past six months," she told reporters at the National Association for Business Economics conference in Washington. Shipping disruptions in the Red Sea aren't likely to cause a broad resurgence of price hikes, particularly as the U.S. is less dependent on these routes, she noted.
Brainard, formerly vice chair of the Federal Reserve, also cheered strong U.S. productivity growth over the past year, saying an increase in business dynamism, labor engagement, expansion of labor supply and movement of people into new jobs and sectors are reasons to expect these gains to continue, she said. President Joe Biden's agenda is also leading to new investments in infrastructure and clean energy, boosting productivity in the long run, she said. (SEE: MNI INTERVIEW: Rising US Productivity Keeps Wages Sustainable)