U.S. Treasury Secretary Janet Yellen said she feels positive about inflation, arguing that energy prices and supply chain problems around the world are easing while the U.S. labor market remains strong.
“What we are seeing now is a significant easing of supply chain problems, rising inventories and lower transportation costs,” Yellen told reporters after visiting a regional medical center in Zambia’s capital Lusaka. “Thus, inflation in those parts no longer contributes in a very meaningful way,” he argued.
Several inflation indicators have shown positive signs in recent weeks. The consumer price index (CPI) rose 6.5% in December from a year earlier, down from 9% in June. Producer price inflation also declined at a faster-than-expected pace.
Goods prices fell late last year, Yellen said, adding that the overheated housing market, which contributed significantly to price pressures in the second half of the year, should cool down by the middle of the year.
“Over the next six months, the housing price boost relative to U.S. inflation should be largely gone. We believe a strong U.S. labor market and inflation will continue to improve.
news-rsf-original-reference paywall">Original title:Yellen Sees ‘Very Helpful Signs’ on US Inflation Front(excerpt)
