US Treasury Secretary Janet Yellen was reassuring on Monday regarding the inflationary risk, which she still considers transitory and linked to the turbulence of the end of the pandemic crisis.
During a press conference in Dublin on the occasion of the opening of the COP 26, the American minister (and former boss of the Fed) estimated that the American economy is not overheating and that if the inflation is higher than in recent years, mainly due to the disruptions caused by the Covid-19 pandemic.
“I would not say that the US economy is currently overheating. There are 5 million vacant jobs compared to the pre-pandemic level, the workforce has shrunk and the reasons are linked to the Covid-19 epidemic. “said Ms. Yellen.
She said she expected the constraints on employment and supply chain difficulties to ease as the pandemic was brought under control, noting that the rising demand for durable goods in the United States. United came about at a time when it was difficult to get hold of this type of goods.
The Fed on the verge of clarifying its “tapering” schedule
Ms. Yellen was speaking as the Federal Reserve (which she chaired from 2014 to 2018) will meet on Tuesday and Wednesday, and is expected to specify on this occasion the timetable for the reduction of its asset purchase program (“tapering “), which is expected to kick off in November or December.
This program, launched in 2020 to support the economy in the face of the pandemic crisis, consists of buying $ 120 billion in government bonds ($ 80 billion) and mortgage-backed assets ($ 40 billion) each month. .
Faced with a solid economic recovery and improving health conditions, accompanied by higher-than-expected inflation, the Fed has made it clear in recent weeks that it will cut its purchases to zero around mid-year. -2022. Investors are eager to know how quickly the Fed will tapering.
This will be the first step towards a rise in key rates, which is currently not expected before the end of 2022, or even in 2023. The trend in inflation, which turns out to be higher and more sustainable than anticipated, could however change these expectations …
–
