Jerome Powell Won’t Say if Canceling Student Loan Debt Would Be Inflationary

Rep John Roe (R-TN) asked Fed Chairman Jerome Powell if student loan debt cancellation would be inflationary. The Fed Chairman couldn't answer the question.

TRANSCRIPT:

ROSE: “... canceling federal student loan debt held by Americans could increase the inflation rate as much of a half a percentage point and would at 1.6 trillion to the national debt. This estimate notably also did not incorporate the possible effect that student loan — student debt cancellation would have on increased college tuition prices. Chair Powell, has the Fed done any analysis on the inflationary impact of these proposals to forgive student loans being actively considered by congressional Democrats and the administration?”
Powell: “Not that I know of. You know, we would look to CBO, and legislation — we — we tend to put it in our — in our — our models of the economy when we think there is really, really, likely — likely going to be legislation.”
ROSE: “Generally though, would you expect forgiving 1.6 trillion in debt, whether it’s student loan debt or credit card debt to have an inflationary impact?”
Powell: “Well, again, I’m going to, you know, leave that to CBO to score and also the congressional — the Office of Management and Budget. We — we just routinely just do not score congressional proposals. It would get us involved in political things and you know, why would we be independent then? So, to be independent, we need to be out of these very difficult fiscal issues which — which are really your job.”

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