Why is U.S. Inflation So Low? Households Stashing Stimulus Checks in the Banks (or Paying Down Debts)

from Confounded Interest

There is a great fear about inflation in the US. And why it remains so low DESPITE the trillions in stimulus spending by the Biden Administration.

According to a survey by The New York Fed, consumers are expected to spend less than 25% of the latest stimulus checks. The checks are expected to be used to pay down debt and add to savings.

(Bloomberg) — U.S. consumers are socking away 42 cents of every dollar received from the third round of pandemic stimulus checks sent out in March, according to a new poll by the Federal Reserve Bank of New York.

Less than 25% of the funds are being spent and the remainder is being used to pay down debts, according to the New York Fed survey data, published Wednesday.

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