New York
Treasury Secretary Janet Yellen has struck a cautiously optimistic tone for 2023, predicting a significant slowdown in inflation and stressing that a recession is not needed to bring prices back under control.
Chairman Yellen said in an interview on Sunday’s CBS “60 Minutes” that, “barring any unforeseen shocks, I think inflation will be significantly lower by the end of next year.
” Yellen pointed to falling gas prices, with AAA announcing Monday that the national average fell 52 cents a gallon last month, leading to lower transportation costs and faster delivery times.
Chairman Yellen said of the current period of high inflation, “I hope it will be short-lived.
” “We learned many lessons from the high inflation of the 1970s.
And everyone recognizes the importance of keeping inflation under control and making sure it doesn’t become an endemic problem for the economy.
Yellen, like many economists and the Federal Reserve, is overly optimistic about inflation.
Earlier this year, she admitted she was “wrong” about the rise in inflation, and in June she told Wolf Blitzer that “at the time it was completely unclear” what a “major economic shock” a war with Russia would cause.
I didn’t understand it,” he said.
Ukraine.
The comments came after wholesale inflation beat expectations on Friday and producer price inflation rose at the slowest pace in 18 months in November.
The more closely watched Consumer Inflation Report, due out this Tuesday, is expected to show a similar slowdown in consumer prices.
The U.S.
Federal Reserve is widely expected to raise interest rates for the seventh time in a row on Wednesday, but investors expect the U.S.
central bank to slow the pace of rate hikes by three-quarters of a percentage point to half a percentage point.
There is.
The Federal Reserve’s aggressive interest rate hikes have raised borrowing costs and pushed credit card interest rates to record highs, raising fears of an economic recession.
Although Yellen acknowledged that the economy could slip into a recession in the coming months, the former Fed chair stressed that she has no obligation to rein in inflation.
Yellen said, “There is a risk of recession.
” “But in my opinion, we certainly don’t need to bring inflation down.
” Closer the conversation Like other Biden administration officials, Yellen said the economy could move from blockbuster growth to more sustained growth.
He argued that we are in the midst of a healthy transition to what is possible.
.
“We recovered very quickly from the pandemic.
Economic growth is very high,” Yellen said.
“Growth has to slow to keep inflation down, and because almost everyone who wants a job has a job.
” Yellen said the U.S.
economy is at or near full employment; He said this meant rapid growth was “not needed” to get people back to work.
The Minister of Finance said he was trying to bring compassion and a sense of urgency to policy-making by highlighting to staff that real people were suffering.
In 2009, during the Great Recession and millions of people out of work, Yellen told staff at the San Francisco Federal Reserve, where she served as president from 2004 to 2010, that there was real truth behind the labor market.
He recalled that he reminded him that there were people like him.
Statisticians and economists have to worry about their own well-being.
“I think I said, ‘These guys are assholes,'” Yellen said.
“I wanted those who worked for me to take seriously the harm and misery that too many Americans experience.
”
