4 Key Points on Inflation

  1. The main driver of inflation today is the pandemic, which has disrupted the whole economy. The main solution is ending the pandemic.
  2. While worker wages have grown during the pandemic, there is no reason to believe worker wage increases are what’s driving inflation.
  3. There is little reason to believe too-generous government relief spending is driving inflation. The weakened economy needed it to grow in 2021, and that spending is falling sharply in 2022.
  4. Hopes of closing the United States’ terrible racial wage and employment gaps would be dimmed if policymakers overreact and sacrifice growth for lower inflation.