Yellen: "Inflation Will Remain High... An Unacceptably High Level"

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Janet Yellen, the U.S. Treasury Secretary, predicted on the 7th (local time) that U.S. inflation, at its highest level in 40 years, will remain elevated. She described the current inflation as an unacceptable level and emphasized the need for appropriate fiscal policies to complement the Federal Reserve's (Fed) monetary tightening.

According to the Wall Street Journal (WSJ) and others, Secretary Yellen appeared before the U.S. Senate Finance Committee hearing that day and stated, "I earnestly hope inflation will decline, but I expect it to remain high." This suggests that the average inflation increase this year will exceed the 4.7% initially forecasted by the Joe Biden administration. She mentioned, "It seems it will be higher."

Secretary Yellen diagnosed, "We are currently facing macroeconomic challenges," adding, "Inflation is at an unacceptable level, the winds of supply chain disruptions caused by the pandemic are strong, and the oil and food markets are also disrupted due to Russia's invasion of Ukraine." She also emphasized, "Controlling inflation is the top policy priority," and stressed, "Appropriate fiscal policies are needed to support the Fed's monetary policy to reduce inflationary pressures without harming the health of the labor market." She explained that this would be complemented by deficit reduction and other measures.

The U.S. Consumer Price Index (CPI) inflation rate has recently remained in the 8% range, marking the highest level in 40 years. This has also emerged as a major political issue ahead of the midterm elections in November.

Secretary Yellen emphasized, "About one-third of U.S. inflation is caused by vehicle supply issues due to semiconductor shortages," and stated that semiconductor investments will continue to maintain core industrial competitiveness. She added, "Semiconductors are important not only economically but also from a national security perspective, and many countries are providing subsidies to semiconductor producers, which is detrimental to increasing U.S. production capacity."

This content was produced with the assistance of AI translation services.