In an interview with Fox Business Network on Wednesday, Treasury Secretary Janet Yellen reacted to the CPI in February and the rise in inflation over the past three months, saying, “We don’t expect this to continue smoothly from month to month, but the trend is is clearly in good condition.”
asked Fox Business White House correspondent Edward Lawrence. [relevant exchange begins around 1:25] “So, when we released the CPI inflation report, it showed that the inflation rate was higher than expected, but when we look at the month-on-month comparison, December, January, and February, we see that the inflation rate has increased. Is inflation coming back?”
Yellen said, “Well, look, inflation is down almost two-thirds from the high it reached in 2022, and the trend is clearly positive.” I don’t think this is going to continue smoothly from month to month. But the trends are clearly positive. That said, President Biden’s top priority will be to address the high costs that many Americans are concerned about: their ability to make a living. And he’s doing everything he can to lower prescription drug prices, lower health care costs, and, of course, lower the investments we’re making to promote renewable energy. .The United States will increase energy security and lower energy costs for households. In the State of the Union, the president will also increase the supply of affordable housing and make housing more affordable for new homebuyers. I suggested a method.”
Lawrence then said, “But when we talk about prices, we’ve had a 3 in front of CPI inflation since last July.” Now, Jamie Dimon says the worst case is stagflation.” But why is it wrong?”
Yellen responded: “Well, I don’t think there will be stagflation. Many forecasters believe that inflation is on a downward trajectory over time.” The single biggest driver of inflation is housing costs; If you look at the market for new apartment rentals, you’ll see that in many parts of the country, rental prices for new apartments have actually declined across the board, staying flat to slightly down. Until that’s reflected in the CPI. That will take some time, so I expect inflation, the single biggest contributor to CPI, to fall this year.”
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