“Inflation rose by more than most economists, including me, expected and of course it’s our responsibility with the Fed to address that. And we will,” Yellen told CNBC in a live interview.
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U.S. Treasury Secretary Janet Yellen said on Thursday she was sure the Federal Reserve and the Biden administration would make strides expected to bring down inflation throughout 2022, gave the COVID-19 pandemic is managed. The Treasury chief and previous Fed chair said that U.S. household finances were in good shape, for certain families better than anyone might have expected the pandemic, and built-up savings should assist with supporting the economy for quite a long time into the future, even with less financial help going ahead.
“We have been hit by a pandemic that has created economic challenges that none of us anticipated, and it is our hope and intention to bring inflation down to levels that are consistent with the Fed’s interpretation of price stability,” Yellen said.
Meanwhile, she said it was critical for more people to come back into the labor force, which would help ease supply pressures. This will require the pandemic to be brought under control. If that happens, she said she expects inflation pressures to ease throughout 2022.
Yellen also told CNBC that she views Biden’s proposed Build Back Better social and climate legislation as encouraging more workforce participation through its child care and early childhood education provisions.