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Yellen dismisses inflation fears from COVID-19 relief package

Yellen dismisses inflation fears from COVID-19 relief package
© Camille Fine

Treasury Secretary Janet YellenJanet Louise YellenJudge rejects GOP effort to block tax provision in Biden stimulus bill Growing inflation is Biden's hidden tax on working Americans The Biden administration's domestic approach to foreign policy MORE said Monday that she doesn't believe fears of rising inflation or unemployment resulting from the Democrats' $1.9 trillion COVID-19 relief package are warranted.

Speaking with MSNBC host Stephanie Ruhle, Yellen argued that the stimulus package expected to be passed by the House and signed by President BidenJoe BidenBiden says Beau's assessment of first 100 days would be 'Be who you are' Biden: McCarthy's support of Cheney ouster is 'above my pay grade' Conservative group sues over prioritization of women, minorities for restaurant aid MORE in the coming days would not pour too much gas on the U.S. economy, causing prices of goods to rise.

"I really don’t think that is going to happen. We had a 3.5 percent unemployment rate before the pandemic, and there was no sign of inflation increasing," she said, adding that the administration has "tools" to reduce inflation if experts believe it will become a problem.

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The former Federal Reserve chair also said she believes the U.S. will return to "full employment" by 2022 should the administration's plans proceed.

"I'm anticipating if all goes well that our economy will be back to full employment, where we were before the pandemic, next year. And the Congressional Budget Office estimated that without this, it could probably take until 2024," Yellen said.

The Biden-backed coronavirus aid and stimulus plan passed the Senate after a marathon voting session over the weekend. It now heads back to the House, where Democrats appear to have the votes to pass it despite likely universal opposition from Republicans — as well as grumblings from some progressives that it doesn't go far enough.

Yellen in January said going big with next round of COVID-19 aid is the smartest thing to help Americans and businesses struggling as a result of the pandemic.

"Right now, with interest rates at historic lows, the smartest thing we can do is act big," she said in January. "In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time."