Biden's economic advisor Cecilia Rose plays down fears Covid rescue plan will ...

One of Biden's top economic advisers said today that the US's economic recovery after the Covid-19 crisis would be 'bumpy' but played down fears it will drive up inflation.

Cecilia Rouse, chair of White House's council of economic advisers, accepted that there were 'risks' of President Joe Biden's $1.9trillion Covid recovery plan but defended his handling of the pandemic.

Speaking on Radio 4's Today programme, she dismissed fears that the stimulus package was driving up inflation and insisted that any increased price pressures will be 'transitory'.

It comes after Larry Summer's blasted Biden's recovery plan as the 'least responsible' economic policy in 40 years on Bloomberg Television's 'Wall Street Week'.

When asked about his comments, Rouse said: 'We understand that there are risks, but really all of the signs suggest that this inflation is transitory.

'We are obviously watching as are you as are the rest of the world, but really it was the right thing for us to do and we are getting through this pandemic and we are leading the world really in that effort.'

Financial markets had an unwelcome jolt last month when the Labor Department reported that consumer prices had jumped 0.8 per cent from March to April and 4.2 per cent from 12 months earlier - the largest year-over-year increase since 2008.

Many people blamed prices shooting up on the huge stimulus program, but the economic advisor insisted that Biden's plan was not driving inflation upwards. 

Despite this, Rouse did acknowledge that the US was set for economic struggle in the coming months and warned that the recovery from the pandemic would be 'bumpy'.

She continued: 'This is going to be a bumpy recovery and we still see, if we outlook at our financial indicators, it still suggests inflation expectations are well anchored, we know that is what underlies the kind of inflation you are very concerned about.'