As Congress and the Biden administration debate the need for more economic stimulus check to help Americans weather the ongoing pandemic and its economic fallout, some are starting to ask if rising inflation could derail plans for more aid. The latest inflation report from the Bureau of Labor Statistics shows that the inflation rate was up 4.2% in April from the same period one year prior and is expected to accelerate further going forward.
The concern is that if inflation rises too quickly, a future stimulus check package may not be needed. The Federal Reserve has already said that it wants to keep the inflation rate at 2% or lower, and if inflation gets too high, the Fed may decide to raise interest rates, which could put a damper on economic growth. This could mean that any plans for additional stimulus in 2023 could be put on hold if inflation rises too quickly.
Stimulus Check Fuels Inflation?
At the same time, some economists are concerned that additional stimulus money could fuel inflation even further. Money that Congress has already passed in 2020 and 2021 has done little to spur economic growth, and sending more money out could lead to an even larger inflation rate.
Of course, no one knows for sure what the inflation or economic situation will be like in 2023. Right now, Congress and the Biden administration are focused on creating a plan to get the economy back to full health as soon as possible. This includes stimulus measures, but it’s possible that if inflation stays in check, the need for additional stimulus check money could be reduced.
Inflation is a tricky beast, and it’s impossible to predict where it will be in 2023. But as the debate continues about whether or not more stimulus money is needed, the potential for inflation to take it off the table will be an important factor to consider.