Treasury Secretary Janet Yellen says inflation won’t come down until NEXT YEAR

Treasury Secretary Janet Yellen said on Thursday that inflation will “definitely” fall next year, but denied that the country was in recession because the labor market is so “tight”.

“A full-scale recession is a period of excessive unemployment. You don’t have a strong job market,” Yellen said during a performance at the Atlantic Festival in Washington. “We really do have one of the tightest labor markets we’ve had in American history.”

Ron Brownstein of the Atlantic asked her if inflation would be under control by the end of next year — or if it could become a theme in the 2024 presidential election.

“I believe it will get there, definitely next year,” she told Brownstein. “Let’s be clear that there are risks.”

The example she gave was either: Russian President Vladimir Putin continued his attack on Ukraine.

“I think it will be better,” she said. “Maybe we’ll get through next year, but I certainly expect inflation to come down.”

Janet Yellen (right) was asked by Ron Brownstein (left) of the Atlantic if inflation would be under control by the end of next year — or if it could become a theme in the 2024 presidential election

At the height of her appearance, she recognized how troublesome inflation had become.

“First let me say that I think inflation has been unacceptably high,” she said. “It’s a huge problem for every American household. It creates a great sense of economic uncertainty for Americans. And we don’t want it to become endemic.’

Yellen, 76, then recalled her own experience of living in the 1970s.

“It’s President Biden’s top economic priority to get it down, and that’s what the Fed is trying to do,” she said.

She blames inflation on a number of things.

The bottlenecks in the supply chain related to the COVID-19 pandemic.

“And Putin’s totally unacceptable, immoral war against Ukraine has led to an increase in the energy and food crisis that also contributes to inflation,” she added.

Yellen said the government has taken steps to ease supply chains and release oil from the Strategic Petroleum Reserve.

‘But we also have a very tight labor market,’ she says.

“Right now we have two job openings for every unemployed worker, and I think that puts inflationary pressures in the system,” she later explained.

She also said she believed there was a way to lower inflation without cutting wages for workers.

“Now I believe there is a path that can succeed in curbing inflation while maintaining what I believe we would all consider a strong labor market,” Yellen said.