Biden's Build Back Better Act would have muted impact on inflation, Moody's says

The Build Back Better Act approved by House lawmakers last week would boost U.S. economic growth while having a "limited" impact on inflation, according to Moody's Investors Service.

"The additional federal spending would occur over 10 years, include significant revenue-raising offsets and would likely only start to flow into the economy later in 2022 at a time when inflationary pressures from disruptions to global supply chains and U.S. labor supply likely will have diminished," said Rebecca Karnovitz, senior analyst with Moody's and the lead author of a new report that examines the economic impact of the $1.7 trillion social spending bill, in a statement. 

President Joe Biden also this month signed a $1.2 trillion infrastructure bill. The fiscal packages has raised questions in some quarters about whether the jump in federal spending could further stoke inflation, already seeing the fastest rise in consumer prices in 30 years.