TFIGlobal
TFIGlobal
TFIPOST English
TFIPOST हिन्दी
No Result
View All Result
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean
TFIGlobal
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean
No Result
View All Result
TFIGlobal
TFIGlobal
No Result
View All Result
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean

Biden’s infrastructure plan is going to destroy emerging markets like Brazil and Mexico

Sohil Sinha by Sohil Sinha
April 21, 2021
in Americas
Joe Biden, infrastructure bill

(PC: Deadline)

Share on FacebookShare on X

As the Biden administration presses ahead with its proposed US$2 trillion domestic infrastructure programme, concerns about the program’s ability to destabilise emerging markets have arisen. If passed, the cumulative amount of extra capital injected into the US economy in relief and recovery packages since March 2020 – when the Covid-19 pandemic first broke out – will reach US$7.2 trillion, the largest such injection since World War II.

Policy experts believe that the new initiative would help modernise ageing bridges and roads while also combating climate change. They can’t agree, however, on whether excessive liquidity would cause large quantities of capital to flow in and out of emerging markets like China, Brazil, and Mexico, causing them to become distorted. The question is whether the new infrastructure programme – the American Jobs Plan – would trigger inflation and price rises in the United States, causing sharp fluctuations in capital flows in other countries.

Also Read

Explained: What the US–Ukraine Mineral Deal Really Means

Hegseth: US won’t be guardian of Europe

Trump Truce? US might recognize Crimea as Russian territory- Reports

“The Fed will try to hold out raising rates as long as possible, and what I mean by that is until inflation expectations start going out about 3 per cent,” said Benn Steil, director of international economics at the Council on Foreign Relations in New York. “But I would be surprised if the Fed wasn’t compelled to raise rates by sometime next year,” he further added.

If that happens, international capital may be drawn into the US as bond and loan yields increase, and away from emerging markets, resulting in sharp outflows. The infrastructure bill, according to Steil, is “too large” and “puts enormous pressure on emerging-market central banks to raise rates to avoid massive capital outflows.”

“The US level of activity is likely to be so high in coming months that it may force the Fed to taper sooner than many had originally expected,” said Andrew Bishop, global head of policy analysis at Signum Global Advisors in Washington.

Lawrence Summers, the high-profile Democratic economist who served as director of the Obama White House’s National Economic Council, is one of the bill’s most vocal opponents. Summers, who served as Treasury Secretary in the Clinton administration from 1999 to 2001, wrote in a Washington Post column, “There is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a generation.”

Chairman of the Federal Reserve, Jerome Powell, said last month that the Fed does not plan to lift interest rates until 2023. However, inflation indexes have risen since then. Consumer prices, a primary indicator of inflation, increased by 2.6 per cent in March compared to the same month the previous year, the largest increase since August 2018, according to the Labor Department. Moreover, last week, the Commerce Department announced that early indications of US retail sales increased by 9.8% in March, beating expectations as recovery checks sent to households began to flow into the economy.

If Biden’s infrastructure plan goes through, countries like Brazil and Mexico will see a huge exodus of investment to the US. Following this would be unparalleled unemployment and poverty which have been the main causes of migration into the US from these countries.

An immigration crisis is already boiling on the southern border of the United States with hordes of immigrants crossing the Mexican border and into the United States and the Biden administration has no plans or solutions. Therefore, if the infrastructure plan is rolled out, it would not just be harmful to Brazil and Mexico but its damaging effects will be felt throughout the United States.

Tags: Infrastructure BillJoe BidenShort takesUS
ShareTweetSend
Sohil Sinha

Sohil Sinha

Also Read

Trump executive order to ban Gear of function research linked to covid-19

Trump Bans Gain-of-Function Research linked to Covid-19

May 7, 2025
Defense Secretary Hegseth Orders Major Cuts to US Military’s Top Ranks

Defense Secretary Hegseth Orders Major Cuts to US Military’s Top Ranks

May 6, 2025
Trump announces 100% tariff on non-US Movies

Trump announces 100% tariff on non-US movies, citing threat to National Security

May 6, 2025
Polls, Protests, and Power: Canada Election Drama Unfolds

Canada goes to polls: Carney Leads? Or will Poilievre make up ground

April 28, 2025
Musk about to leave DOGE. What lies ahead?

Musk to leave DOGE? Tesla in trouble?

April 25, 2025
Trump vs Harvard: University sues US President for cutting 2 billion dollar funds

Trump vs Harvard: University sues US President for cutting 2 billion dollar funds

April 22, 2025
Youtube Twitter Facebook
TFIGlobalTFIGlobal
Right Arm. Round the World. FAST.
  • About Us
  • Contact Us
  • TFIPOST – English
  • TFIPOST हिन्दी
  • Careers
  • Brand Partnerships
  • Terms of use
  • Privacy Policy

©2025 - TFI MEDIA PRIVATE LIMITED

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

No Result
View All Result
  • Indo-Pacific
  • Americas
  • Canada
  • Indian Subcontinent
  • West Asia
  • Europe
  • Africa
  • The Caribbean
TFIPOST English
TFIPOST हिन्दी

©2025 - TFI MEDIA PRIVATE LIMITED

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. View our Privacy and Cookie Policy.