Treasury Secretary Janet Yellen and Jerome H. Powell, the Federal Reserve chair, will appear again before Congress on Wednesday, this time before the Senate Banking Committee.
On Tuesday, Ms. Yellen and Mr. Powell appeared before the House Financial Services Committee to testify on the economic recovery from the pandemic.
Mr. Powell told lawmakers that the economy was healing from the pandemic downturn and continued to play down inflation concerns at the hearing on Tuesday.
In response to a question about whether the $1.9 trillion spending package to combat the virus could cause prices to shoot higher — especially if combined with President Biden’s plan to spend as much as $3 trillion on an infrastructure package — Mr. Powell said the Fed did not expect a lasting surge in inflation.
“We do expect that inflation will move up over the course of this year,” Mr. Powell told the committee, adding that some of the rise would be mechanical as low readings from March and April of last year dropped out of the data, and part of it might be driven by a bounce-back in demand.
“Our best view is that the effect on inflation will be neither particularly large nor persistent,” he said. And if it does pick up in a more concerning way, “we have the tools to deal with that.”
Ms. Yellen faced questions on executing Mr. Biden’s $1.9 trillion economic relief legislation. The Treasury Department has been racing to distribute $1,400 checks to millions of Americans, posing a test for Ms. Yellen’s team, which is not yet fully in place.
Ms. Yellen pushed hard for a robust fiscal relief package, and she has suggested that the next bill needs to be focused on addressing longer-term structural issues facing the economy that have led to vast income inequality.