The Trump administration’s policies will raise U.S. wages without causing broader inflation, Treasury Secretary Steven Mnuchin said in an interview with Bloomberg, brushing aside signs that investors are growing nervous about rising prices.
“There are a lot of ways to have the economy grow,” Mnuchin told the news service aboard a train to Philadelphia on Thursday, where he toured the U.S. Mint. “You can have wage inflation and not necessarily have inflation concerns in general.”
An unexpectedly big jump in average hourly earnings in January set off a stock-market swoon as investors worried about higher inflation and interest rates. In addition, long-term Treasury yields have surged in recent weeks, in part driven by concerns that widening budget deficits under President Donald Trump will fuel inflation.
As Trump’s chief economic cheerleader, Mnuchin has consistently deflected any suggestion that the president’s policies could have a downside. He sidestepped the idea that tax cuts and increased federal spending Trump has signed into law amount to an economic stimulus. The government will issue more than $1 trillion in new debt this year, analysts say, in part as a consequence of higher budget deficits, Bloomberg reports.
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