The United States House of Representatives passed a $1.9 trillion relief bill on Wednesday. The bill was already passed by the senate so it will now head to President Joe Biden’s desk to be signed.
This bill has been the subject of intense debate as many policymakers and economists have been concerned about inflation once the economy recovers from this coronavirus pandemic.
This financial relief is expected to contribute to temporarily high inflation. It is believed this will occur when most Americans are vaccinated and able to begin traveling and spending the way they did prior to when COVID-19 restrictions were put in place.
Bitcoin supporters have touted the stimulus as a chance for the digital asset to shine as a hedge against inflation. The Federal Reserve doesn’t expect the economy the central bank’s 2% inflation target, on average, until at least 2023.
The bill itself however, is not expected to affect the price of Bitcoin. Steven Kelly, a research associate at the Yale Program on Financial Stability, spoke to this point.
“Given markets have known the payments were going to be hitting folks’ accounts soon, I don’t know that’ll we see some unexpected jump in bitcoin or other risk assets,” Kelly said.
“Not least because there is still a lot of economic pain out there. These checks will go toward filling that gap first and foremost. I don’t expect this to be a government funding of the retail investor army by any means. Though I’m sure some anecdotes will come out to that effect.”
A Lot Of Pieces To The Relief Bill
There are a lot of pieces to this relief bill as a whole. All Americans who make $75,000 or less will receive checks of $1,400. Those who make $80,000 or less will receive slightly less and thresholds for joint filers are double those amounts.
The bill also extends the child tax credit for one year. It will increase to $3,600 for children under 6 and to $3,000 for kids between 6 and 17.
Additionally, the $300 per week jobless aid supplement and programs making millions more people eligible for unemployment insurance has been extended to September 6.
Other benefits include $20 billion towards COVID-19 vaccine manufacturing and distribution. Another $50 billion will be put towards contact tracing.
It adds $25 billion in rental and utility assistance and about $10 billion for mortgage aid. It also includes an expansion of subsidies and other provisions to help Americans afford health insurance.