Business Standard

Joe Biden's student-loan relief adds new wrinkle to inflation debate

The combination of higher savings and lower debt could drive inflation up by 10 to 30 basis points

US President Joe Biden at Quad summit in Tokyo, Japan. (Photo: Reuters)
Premium

US President Joe Biden at Quad summit in Tokyo, Japan. (Photo: Reuters)

Bloomberg
President Joe Biden’s plan to forgive a portion of student loans held by tens of millions of people will ripple through the economy as personal spending and savings shift, but no factor will be more closely watched than inflation.
 
In announcing the plan Wednesday, the White House flagged that the move would have competing impacts. On the one hand, it would reduce overall household debt and potentially provide more spending power. On the other, it offers a timeline to restart payments that have been suspended for more than two years.
 
Overall, the combination of higher savings and lower debt could
Topics : Joe Biden

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Aug 26 2022 | 12:35 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com