This thread by Jason Furman, who served as the chairman of the Council of Economic Advisers under President Obama, is worth a read:
Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless. Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.
— Jason Furman (@jasonfurman) August 24, 2022
Furman notes that if the Federal Reserve wants to offset the inflationary impact of Biden’s student-debt cancellation, it could require raising interest rates by an additional 0.75 percent beyond what is already necessary:
That is a relatively small inflation number. But would take about 50-75bp on the fed funds rate to extinguish that much inflation. Is the Fed going to try to offset this? Or will it do what it did with the American Rescue Plan and ignore that rapidly changing fiscal landscape?
— Jason Furman (@jasonfurman) August 24, 2022