The Secretary of the Treasury of the United States, Janet Yellenaffirmed this Sunday, in Washington, that “it is probable that the unacceptably high prices are held for consumers for 2022“, and that also “the economy is likely to slow downe”, as reported by the Bloomberg agency.
Speaking to ABC, Yellen said that “we’ve had high inflation so far this year, and that ensures higher inflation for the rest of the year. I expect the economy to slow down but I don’t think a recession is inevitable.” .
US inflation accelerated to 8.6% in Maya new high in the past 40 years indicating that price pressures are taking hold in the economy.
Those figures dashed any hope that inflation would start to ease, prompting the Federal Reserve (FED) to unleash its biggest interest rate hike since 1994.
For Yellen, the reasons behind the stubborn inflation are “global, not local”while noting as major problems, “the disruption in energy supply due to the war in Ukraine and goods arriving from China, where Covid-related lockdowns continue.”
“These factors are unlikely to subside immediatelyYellen said, anticipating that “a gasoline tax break is worth considering if it can help consumers weather inflation.”
Along the same lines, the president of the Cleveland Federal Reserve, Loretta Mester, maintained that “the threat of a recession in the US is increasing. The risks of recession are increasing in part because monetary policy could have pivoted a bit before”.
In a report to the CBS network, Mester considered that “it will take several years for the annual inflation rate to approach the FED’s 2% target.”
For his part, the director of the White House National Economic Council, brian deesepainted a more optimistic picture of the economy than Yellen and what FED officials say, noting that “independent forecasters see inflation will start to moderate in the course of this year“.
“We have real strengths in this economy,” Deese told CBS, later noting that “the administration is looking to bring down inflation in a way where we don’t have to give up all of those economic gains.”
