Washington: US Treasury Secretary Janet Yellen said that she expected the country’s inflation rates to fall to acceptable levels in the second half of next year.
“Monthly rates of inflation have already fallen substantially from the very high rates that we saw in the spring and early summer. On a 12-month basis, the inflation rate will remain high into next year because of what’s already happened,” Xinhua news agency quoted Yellen as saying on CNN.
“But I expect improvement… by the middle to end of next year, second half of next year,” Yellen said, adding the Covid-19 shock to the economy has caused disruptions that “we will be working through over the next year”.
“The Covid crisis markedly diminished spending on services and caused a reallocation of spending toward goods. And the supply of goods to Americans has increased substantially, but there’s still pressure there,” she said.
Yellen also pushed back against criticism that the US is about to lose control over inflation.
“I agree, of course, we are going through a period of inflation that’s higher than Americans have seen in a long time. And it’s something that’s obviously a concern and worrying them. But we haven’t lost control.
“As we make further progress on the pandemic, I expect these bottlenecks to subside. Americans will return to the labor force as conditions improve,” the Treasury Secretary added.
Yellen’s remarks came after the Labour Department recently reported that US inflation remained elevated in September as supply chain disruptions had persisted for months.
Over the past 12 months through September, the consumer price index (CPI) increased 5.4 per cent, slightly up from the 5.3 per cent pace for the 12-month period ending August, according to the Department.