Business & Economy

On The Money: Inflation jumps at fastest pace since 2008 | Biden ‘encouraged’ on bipartisan infrastructure deal

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THE BIG DEAL—Inflation jumps at fastest rate since 2008 as coronavirus rebound spurs demand: Consumer prices rose at the fastest rate in more than a decade as the recovering U.S. economy pushes inflation higher, according to data released Wednesday by the Labor Department

What happened? Most of April’s price increases were driven by areas of the economy hit hard by the coronavirus recession adjusting to a surge of new demand. 

The political upshot: Inflation was widely expected to keep rising as prices recovered to and slightly exceeded their pandemic lows with the U.S. economy kicking back into gear. But the April increases in inflation were larger than some analysts expected, causing stock futures to sink after the release of the data. I break it down all here.

Reactions:

LEADING THE DAY

Biden ‘encouraged’ by meeting with congressional leaders on infrastructure: President Biden on Wednesday said he was “encouraged” about the prospects of an infrastructure deal after meeting with top congressional leaders, even as he acknowledged the two parties remain at odds on how to finance a package.

“I’m encouraged that there’s room to have a compromise on a bipartisan bill that’s solid and significant and a means by which to pay for it without dropping all of the burden on middle class and working class people,” Biden added. The Hill’s Brett Samuels has more here.

The prospects: The issue of how to pay for the eventual package remains one of the biggest roadblocks to getting an infrastructure deal done. Still, Biden has remained optimistic even as the White House says it wants to see progress by Memorial Day.

“I want to make it clear,” Biden told MSNBC. “I want to get a bipartisan deal on as much as we can get a bipartisan deal on. And that means roads, bridges, broadband, all infrastructure.”

Judge rejects GOP effort to block tax provision in Biden stimulus bill: A federal judge on Wednesday ruled against an effort by Ohio’s Republican attorney general to temporarily block a provision of President Biden’s coronavirus relief law that forbids states from using federal aid to offset any future tax cuts.

In a narrow victory for the Biden administration, District Court Judge Douglas Cole ruled that Ohio’s lawsuit against the tax provision has merit and may very well succeed in court but that a preliminary injunction against the law’s enforcement would be inappropriate at this stage, when it is unlikely that the Treasury Department would take action against the state.

“The bottom line is this — a preliminary injunction that stands no meaningful prospect of ever being enforced, as the Secretary is unlikely to be in a position to recoup funds while this suit is pending, adds nothing by way of clarity,” wrote Cole, a Trump appointee on the U.S. District Court for the Southern District of Ohio.

“Thus, while the Court finds that irreparable harm likely exists, the requested preliminary injunction does not avoid that harm,” he added. The Hill’s Naomi Jagoda breaks it down here.

GOOD TO KNOW

ODDS AND ENDS