Former Obama economist says ‘little progress’ on inflation under Biden

A former Obama administration economist warns that the economy is “overheated” and that “little progress” has been made on inflation under the Biden administration.

Jason Furman, who served as chairman of President Barack Obama’s Council of Economic Advisers, described the economy as “very overheated.”

“We have made little progress on inflation, if at all. In the future, there is practically no reason to expect a significant slowdown,” he said.

The consumer price index (CPI) rose 6.4% year on year in January, stronger than expected but remained stable compared to last month. While prices remain above 6%, they are down sharply from a 9.1% jump in June that marked the highest inflation rate in nearly 41 years.

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Inflation is expected to remain about three times higher than the pre-pandemic average on an annualized basis, underscoring the ongoing financial burden on millions of U.S. households due to high prices.

In a tweet, Furman noted that some analysts had predicted that the unfreezing of supply chains was supposed to reduce inflation, but this did not happen.

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“The economy looked like it turned around last summer/fall, but it never did,” he said.

He said there are some signs that inflation may be lowering, including the impact of monetary policy.

“So yes, inflation is more likely to come down from 4.7%. Maybe even up to 3,” he said.

“But there are still forces moving in the direction of high inflation. Commodity prices have fallen in recent months and this probably won’t last. And the extremely tight labor market has had a lagging effect on inflation,” he said.

“6 percent inflation is much more likely than 2 percent inflation.”

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President Biden said lower inflation is good news, but there is still more to be done.

“There is still a lot of work to be done as we move towards more robust, stable growth and there may be setbacks along the way,” he said in a statement when the numbers were released. “That’s why I’m unwaveringly focused on further reducing costs for families, rebuilding our supply chains, and investing in America.”

He also targeted Republicans for a proposal to repeal the “Cut Inflation Act” and accused them of threatening to cut Medicare, Social Secu.Rity and other programs.

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“And some are threatening to default on full US credit and credit, which will drive up spending and create economic chaos. I will strongly oppose any effort to exacerbate inflation and increase spending for families,” he said. “Today’s data confirms that we have made historic progress and are on the right track, and now we need to finish the job.”

Brec Dumas of Fox News contributed to this report.