Thread by @faisalislam

We knew Biden admin “going big” on fiscal support for its economy, but extraordinary to hear first hand from US Treas Sec Janet Yellen, that now, was time to “do more”, not even think about phasing out support, & this applied to rest G7, ie incl UK. Sets tone for #G7UK Cornwall

Given tax deal focus, this might have been missed at G7 -
judging timing & pace of the withdrawal of crisis support, against backdrop of record borrowing and rising inflation = THE fundamental economic judgement call.

US saying choice clear for all: /1

bbc.co.uk/news/business-…

2/ key analytical point Yellen pointed to: US being forecast to regain economic output lost in pandemic first in G7, thanks to vaccines & stimulus.

That, she said wasnt enough, all G7 econs:
- should aim at “returning to pre-pandemic growth paths” - & had fiscal space to do so

3/ JY: “we continue to urge a shift in our thinking from 'let's not withdraw support too early', to 'what more can we do now' - not just to end the pandemic, but to use fiscal policy to invest in addressing generational issues like climate change and inequality."

4/ I had chance to ask the Treasury Secretary if she really thought that at this time of record public borrowing and high inflation, the G7 should continue with its foot on the spending pedal - basically, yes.

Higher inflation “transitory” & shd “look through” arithmetic spikes

5/ Pointedly Yellen told me that the aim for US policy was to get the US back to full employment “by some time next year” given there were still 7 million fewer jobs than pre pandemic, and some of those workers would have to move sectors, support needed to continue