US Treasury Secretary Janet Yellen said she expects price increases to remain high through the first half of 2022 but does not accept criticism that the US is at risk of losing control of inflation.
US Treasury Secretary Janet Yellen said that inflation is expected to ease in the second half of next year as the effects of supply difficulties, the tight US labor market, and other factors from the pandemic fade. The current situation reflects ‘temporary’ distress”.
“I don’t think we’re about to lose control of inflation,” Yellen said, dismissing the criticism voiced by former Treasury Secretary Lawrence Summers this summer, adding: “Americans haven’t seen inflation the way we’ve been experiencing for a long time. But when we get back to normal, I expect this to end.”
Inflation Statement From Powell
Fed Chairman Jerome Powell voiced his concerns over stubbornly high inflation in a higher tone, saying the central bank will begin reducing its bond purchases soon but will remain patient with rate hikes. Powell said policies are “well-positioned” to manage a range of outcomes.
Yellen declined to comment on how she advises President Joe Biden on whether Powell should be reappointed to chair the Fed.
Noting that the pandemic has increased stress in the financial markets, Yellen said, “The core of our financial system has functioned quite well due to improvements in capital liquidity, risk management, and stress testing, and these improvements remained in place during Powell’s administration.”
She said financial regulation was “significantly strengthened” during Powell’s term, as it had been under her and previous Ben Bernanke presidency.
