U.S. Treasury Secretary Janet Yellen had confirming words for the economy today as she said the United States was not losing control of inflation. She even stated that she expects inflation levels to return to normal by the near-end of next year.
Yellen also went on to explain that President Biden’s spending through his domestic infrastructure and ‘Build Back Better’ packages will be allocated throughout the next ten years. She failed to mention the impact of this on the inflation rate, but we can expect that with high government spending prices will rise. However, this seems to not be a concern to the U.S. Treasury Secretary.
Backing up her claim that normal levels won’t return until late next year, Yellen said, “On a 12-month basis, the inflation rate will remain high into next year because of what's already happened. But I expect improvement by the middle to end of next year - second half of next year.”
We know that the ongoing problems with the supply chain have caused enormous problems in a growing demand United States economy which definitely doesn’t benefit the inflation rate. Yellen stated that she expects these bottlenecks to fade away in the near future.
Regardless of the ongoing economic conditions, The Federal Reserve will keep its promise to keep interest rates near-zero and until the economy is back to full employment and an inflation rate of 2% or better.
Article : https://www.reuters.com/world/us/yellen-says-us-has-options-raise-revenue-pay-build-back-better-bill-2021-10-24/
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