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EXCLUSIVE: Treasury Secretary Janet Yellen said Wednesday that ostentation could look a bumpy return to normal aft back-to-back reports showed that value pressures wrong nan U.S. system rebounded astatine nan commencement of nan year.
In a sit-down question and reply pinch FOX Business' Edward Lawrence, Yellen pushed backmost against stagflation concerns and maintained that advancement connected ostentation has not stalled.
"I wouldn't expect this to beryllium a soft way period to month, but nan inclination is intelligibly favorable," she said. "That said, President Biden's apical privilege is addressing nan rumor of precocious costs that concerns truthful galore Americans."
INFLATION RAN HOTTER THAN EXPECTED IN FEBRUARY AS HIGH PRICES PERSIST
Treasury Secretary Janet Yellen appears during a House Financial Services Committee proceeding successful Washington, D.C., connected Feb. 6. (Valerie Plesch/Bloomberg via Getty Images / Getty Images)
Prices for everything including groceries, caller cars and wellness security surged successful 2021 and 2022 arsenic nan consequence of rampant inflation, which was caused by COVID-19 pandemic-induced disruptions successful nan world proviso chain, an highly tight labour marketplace and accrued user request fueled successful portion by stimulus cash.
While ostentation has fallen considerably from a highest of 9.1% notched during June 2022, it remains supra nan Federal Reserve's 2% goal. And erstwhile compared pinch January 2021, soon earlier nan inflation situation began, prices are up a stunning 18.49%.
WHY ARE GROCERIES STILL SO EXPENSIVE?
High ostentation has created severe financial pressures for astir U.S. households, which are forced to salary much for mundane necessities for illustration nutrient and rent. The load is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavy affected by value fluctuations.
But advancement connected ostentation has mostly flatlined since June, pinch nan user value scale hovering astatine aliases supra 3% for nan past 9 months, stoking concerns connected Wall Street complete nan anticipation of "stagflation." Stagflation is nan operation of economical stagnation and precocious inflation, characterized by soaring user prices arsenic good arsenic precocious unemployment.
Stagflation fears surged successful 2022 arsenic nan Fed began aggressively hiking liking rates to quell raging inflation, but those mostly dissipated past twelvemonth amid signs that value pressures were subsiding without a important deed to economical growth.
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Although location person been immoderate signs precocious that ostentation is proving to beryllium stickier than expected, Yellen pushed backmost against those worries.
People shop astatine a location betterment shop successful Brooklyn, New York, connected Jan. 25. (Spencer Platt/Getty Images / Getty Images)
"I don't deliberation we're going to spot stagflation," she said. "Most forecasters judge we're connected a way wherever ostentation will travel down complete time."
Yellen besides said she expects nan costs of rental housing, which was 1 of nan largest drivers of ostentation successful January and February, to autumn successful nan coming months arsenic tenants motion leases pinch little rents.
"I person each anticipation that nan azygous biggest contributor to ostentation is going to beryllium moving down complete this year," she said.
