Business Maverick

International Finance

Yellen Still Hopes U.S. Inflation Gets Back to 2% by Year-end

Janet Yellen, U.S. Treasury secretary, speaks during the U.S. Conference of Mayors winter meeting in Washington, D.C., U.S., on Wednesday, Jan. 19, 2022. Yellen said she doesn't expect the omicron variant of the coronavirus to disrupt the ongoing economic recovery.

U.S. Treasury Secretary Janet Yellen said she continues to forecast inflation falling close to 2% by the end of 2022.

“I expect inflation throughout much of the year — 12-month changes — to remain above 2%,” Yellen said Thursday in an interview with CNBC television. “But if we’re successful in controlling the pandemic I expect inflation to diminish over the course of the year and hopefully to revert to normal levels by the end of the year, around 2%.”

The consumer price index rose 7% in the 12 months through December, the most in almost 40 years, damaging President Joe Biden’s popularity and putting more pressure on the Federal Reserve to sharply tighten monetary policy. The Fed in December signaled it’s likely to raise interest rates by three-quarters of a percentage point and begin trimming its $8.9 trillion balance sheet this year.

Yellen said inflation is a “shared responsibility” between the administration and the Fed, and expressed confidence the central bank was moving appropriately.

The Treasury chief acknowledged the U.S. economy had been buoyed in 2021 by fiscal stimulus, which is now waning, but said strong household balance sheets should continue to keep demand healthy.

“Households are in good financial shape — in many ways have come out of this even stronger than they were pre-pandemic,” she said. “There’s a buffer stock of savings that accumulated that I think will continue to support the economy in the years ahead, even with less fiscal support.”


Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

A South African Hero: You

There’s a 99.8% chance that this isn’t for you. Only 0.2% of our readers have responded to this call for action.

Those 0.2% of our readers are our hidden heroes, who are fuelling our work and impacting the lives of every South African in doing so. They’re the people who contribute to keep Daily Maverick free for all, including you.

The equation is quite simple: the more members we have, the more reporting and investigations we can do, and the greater the impact on the country.

Be part of that 0.2%. Be a Maverick. Be a Maverick Insider.

Support Daily Maverick→
Payment options