Secretary of the Treasury U.S, Janet Yellen, judged it possible to reduce inflation to around 2% by the end of the year; a rate that is considered good for the economy. “I expect annual inflation to remain above 2% for much of the year,” he said.
“But if we manage to control the pandemic, I hope that inflation will decrease over the course of the year and that it will return to normal levels, by the end of the year, around 2%,” he told CNBC, stressing that there was “a lot of uncertainty”.
Prices jumped 7% in the United States in 2021, the highest rate in 40 years.
“We do everything we can to solve the problems in the supply chain that have pushed up prices,” Yellen stressed, adding that in this case “the Federal Reserve (Fed) plays an important role.”
He acknowledged that the level and persistence of inflation had been much higher than expected. “We have been hit by the pandemic that has created economic challenges that no one had anticipated,” he explained.
“Inflation rose more than most economists expected, including me, and of course it is our responsibility, along with the Fed, to remedy it, and we will,” he said.
The Republican opposition especially accuses Joe Biden’s fiscal policy of being an inflationary policy, through overly generous stimulus plans for the economy. But for Yellen, these expenses have prevented the world’s largest economy from collapsing and have made it possible to limit inequities.
He also invited us to review “all the bad things that could have happened without the interventions we made with the plan to relaunch the US economy”, such as “a high and permanent unemployment rate” or the increase in “poverty in the kids”. “We were very worried (that this) would happen,” he said.
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