US Treasury Secretary Janet Yellen told reporters Friday that inflation is not becoming entrenched in the US economic picture, as analysts have begun to grow concerned that the rising prices in America seem resistant to the increasingly aggressive policy stance of the US Federal Reserve.
When asked about recent data showing persistent price rises in the consumer and producer sectors, she said, “I don’t believe it’s becoming embedded in the U.S. economy.”
She went on, “The way inflation would become embedded is if you saw expectations of inflation over the medium term rising to levels that are inconsistent with 2% inflation, and then those higher inflation expectations being built into wages and prices.”
She acknowledged the recent data releases show much more needs to be done on the policy side to lower inflation, however she does not believe it is entrenched. She said the fact there are policy measures available is one of the reasons why she “continues to believe that there is a path to lowering inflation while maintaining a strong labor market.”
She added, she has seen some prices, particularly in the areas of production and shipping, which have begun to come down.
The Daily Financial Trends
