Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Yellen says inflation should be lower than current levels by year end

06/23/2021 | 05:27pm EDT
Yellen testifies about Treasury budget request

(Reuters) - U.S. Treasury Secretary Janet Yellen said on Wednesday that inflation should retreat by year end from its current elevated level as supply bottlenecks get worked out, adding she sees little evidence inflation expectations are becoming unanchored.

Yellen, testifying at a Senate subcommittee on the Biden administration's budget proposal, said the economy has been on a "bumpy path" during its reopening after months of restrictions to combat the spread of COVID-19.

Asked by Republican Senator John Kennedy if she thought inflation would keep increasing at the 5% year-over-year rate seen last month, Yellen said she thought it would be closer to 2% by late this year or early 2022.

She also said most measures of inflation expectations beyond the next year show it returning closer to that 2% level, which is the level targeted by the Federal Reserve.

Yellen, echoing other policymakers including Fed Chair Jerome Powell, laid much of the blame for the recent surge in price pressures on supply bottlenecks and shortages that arose in spring as the economy recovers from the COVID-19 shutdowns that threw it into recession last year.

She said she expects those issues to resolve themselves in the months ahead and for longer-running forces that have kept inflation at bay for more than a decade to reassert themselves and guide inflation lower.

Yellen, a former Fed chair, was also pressed by Kennedy on the recent change in Fed policymakers' outlook for rate increases. Projections released alongside their policy decision last week showed members' median expectation for a first interest rate hike moved into 2023 from 2024 back in March.

"The Federal Reserve met recently and they said: 'Look, we know we told you this, but things have changed and we're now telling you that we're likely to have to raise rates sooner and faster than we originally told you,'" Kennedy said. "Why do you think they did that? Because they're concerned about inflation, aren't they?"

"That is not what they did," Yellen answered. "Several individuals wrote down in their own individual forecasts which were published that they saw it appropriate to raise rates sooner than previously (thought)."

Yellen was visibly uncomfortable being pressed on monetary policy issues, which are typically left to the Fed without interference from Treasury.

"I don't really want to comment on the Fed, but I would simply say that is not an announcement that they made," she said.

(Reporting by Dan Burns; Editing by Peter Cooney)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.31% 0.7363 Delayed Quote.-4.60%
BRITISH POUND / US DOLLAR (GBP/USD) -0.02% 1.3891 Delayed Quote.1.70%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.02% 0.80171 Delayed Quote.2.11%
EURO / US DOLLAR (EUR/USD) 0.12% 1.18801 Delayed Quote.-2.84%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.00% 0.013452 Delayed Quote.-1.75%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.01% 0.69741 Delayed Quote.-2.86%
Latest news "Economy & Forex"
09:28aSouth Africa's MTN flags up to 15% fall in first half profit
RE
09:27aAfterpay co-founder says u.s. now represents their largest consumer base in fy21, fastest growing geography on a volume basis
RE
09:16aSquare exec says afterpay would easy entry into new markets, potentially expand in markets it already exists in
RE
09:06a'IT MEANS THE WORLD' : Families and friends reunite at UK's Heathrow
RE
09:05aATTIVO NETWORKS : « Named a 2021 Top 10 Black Unicorn by Cyber Defense Magazine
BU
09:05aCDW : Announces Acquisition of Focal Point Data Risk
BU
09:05aBrazil central bank to raise rates by 100 bps to 5.25% on aug. 4, say 37 of 46 economists polled
RE
09:05aBrazil cenbank set for 100 bps hike, biggest in 18 years
RE
09:05aBrazil selic benchmark rate to reach 7.00% by year-end, according to median forecast, up from 6.50% in july poll
RE
09:00aGold slips on improving risk appetite, U.S. jobs data in focus
RE
Latest news "Economy & Forex"