Yellen sees supply-chain turnaround in latest inflation data
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US TREASURY secretary Janet Yellen welcomed the most recent US inflation figures, saying that some of the most important price pressures over the past two years had begun to decline significantly.
In an interview with National Public Radio on Friday (Jan 13), she said that goods prices “have actually been falling” alongside energy prices, and “some of the supply-chain issues that pushed up the prices of goods and commodities – those have really turned around”.
She noted that indexes for rent continued to rise, but said those were expected to come down “substantially over the next six months or so”.
Data from the Bureau of Labor Statistics released on Thursday showed that consumer prices in the US rose by 6.5 per cent in December, the lowest year-on-year increase since October 2021. More encouraging, prices increased just 0.9 per cent in the second half of the year.
This translated into an annualised inflation rate of 1.9 per cent since the end of June, down from 11 per cent in the first half of 2022.
Yellen repeated her belief that it would be possible for the Federal Reserve to bring inflation down to its target of 2 per cent without triggering a significant increase in unemployment. But she did not say how likely she thought that outcome would be.
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“There is a path there that makes that possible,” she said. BLOOMBERG
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