US Treasury Secretary Janet Yellen said Sunday that she expects inflation to return to levels of around 2% in the second half of next year.
“I hope that happens next year. Monthly inflation rates have already fallen substantially from the very high rates we saw (in previous months), ”he said in an interview with the CNN news network.
“On a 12-month basis, the inflation rate will remain high into next year due to what has already been happening. But I expect an improvement from the middle to the end of next year, the second half of next year, ”he added.
The official denied that the country is losing control over the price hike.
“I don’t think we are about to lose control of inflation. I agree that we are going through a period of inflation that is higher than the one Americans have seen in a long time, and it is something that obviously worries us, but we have not lost control, “he said.
In the last 12 months, ending in September, the consumer price index registered an increase of 5.4%, according to the Bureau of Labor Statistics. Well above the Federal Reserve’s (Fed) long-term target of 2 percent.
The index for all items (except food and energy) increased 4% in the last year, while the energy index rose 24.8% in the same period, which has put American pockets in a tight spot.
Yellen noted that problems in supply chains have affected the United States and other countries as the reopening of the economy, after the pandemic, stimulates an increase in demand.
“As we move forward in the fight against the pandemic, I hope that these bottlenecks will decrease. Americans will return to the workforce as conditions improve, ”he said.
The United States created 194,000 new jobs in September, a considerably lower number compared to the 366,000 jobs created in August. However, the unemployment rate fell to 4.8%, according to figures reported on October 8 by the Labor Department.
The inflation and employment data are the ones that the Fed watches most closely to initiate the withdrawal of stimuli implemented in the wake of the Covid-19 pandemic to prop up the economy.
Analysts foresee that, at its next meeting on November 2-3, the Fed will announce the beginning of the gradual withdrawal of its stimulus program that, so far, has consisted of the monthly purchase of 120,000 million dollars in Treasury bonds and mortgage-backed bonds.
The Secretary of the Treasury also reiterated the need for Congress to raise the debt ceiling for the long term. The United States is expected to reach its borrowing limit around December 3, unless lawmakers reach a long-term agreement.
On October 7, Congress approved a temporary measure that consisted in the extension of the country’s debt ceiling for 480,000 million dollars, which is what the government needs to continue meeting its obligations and debts until that date. . However, a long-term agreement is necessary to prevent the country from going into default.