U.S. Treasury's Yellen allays inflation fears over Biden spending plan

U.S. Treasury Secretary Janet Yellen. /VCG

U.S. Treasury Secretary Janet Yellen on Sunday sought to dispel concerns that President Joe Biden's plans for infrastructure, jobs and families will cause inflation, saying the spending will be phased in over a decade.

"It's spread out quite evenly over eight to 10 years," Reuters quotes Yellen from her interview with NBC.

"I don't believe that inflation will be an issue but if it becomes an issue, we have tools to address it. These are historic investments that we need to make our economy productive and fair."

Biden's plans are funded by a series of tax increases on the wealthiest Americans, less than 1% of the population, and on raising corporate taxes.

Some Democrats have expressed concerns that the tax increases would slow economic growth.

Yellen would not speculate on whether Biden would accept a bill from Congress that does not include a way to pay for the spending increases in his plans.

"He has made clear that he believes that permanent increase in spending should be paid for and I agree," she said.

(With input from Reuters)