The acceleration of inflation in the United States will only be temporary, linked to the reopening of the economy, US Treasury Secretary Janet Yellen reiterated on Wednesday, once again brushing aside concerns about a sharp and lasting rise in prices.
ATS
“I think like most economists, that the recent rise in inflation reflects the difficulties of reopening an economy which has been closed, which has experienced huge fluctuations in spending patterns and which is facing bottlenecks, ”said Minister Joe Biden before a Senate committee.
“I do not expect it to be permanent,” she added, assuring that “we are monitoring inflation very carefully and taking it very seriously, no one wants to go back to the high inflation of the 70s”.
Inflation reached 5% over one year in May, its largest increase in 13 years, according to the CPI index of the US Bureau of Statistics. A spectacular jump, certainly, but due in large part to the effect of comparison with prices which had fallen in spring 2020.
The subject should be at the heart of the meeting of the monetary committee of the American central bank (Fed), which will be followed on Wednesday by a statement and a press conference by its president Jerome Powell.
The Fed uses another measure of inflation, the Commerce Department’s PCE index, which in April experienced its strongest acceleration since 2007, at + 3.6% year-on-year.
Janet Yellen also called on parliamentarians to adopt the 2022 budget presented by President Joe Biden, in particular to address the underinvestment that has led to increasing inequalities in the United States.
Investments
“We must address this lack of investment,” she pleaded, saying that “the private sector is not investing enough” in some areas.
Ms. Yellen listed the need to fund “training programs that can lead to higher wages, (childcare systems) and paid leave that would help people re-enter the workforce, or infrastructure that reduce carbon emissions and stimulate growth in neglected communities ”.
“We have to make these investments at some point, and, from a budgetary point of view, we are at the most strategic moment to make them,” she stressed, while “the cost of the interest on the federal debt (should remain) well below historical levels over the next decade ”.
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