Yellen says US can bring inflation down without hurting jobs
Yellen played down Thursday’s data showing a slowdown in economic growth, saying that “peculiar” elements had depressed the headline increase
Treasury Secretary Janet Yellen said US inflation can come down without requiring a weakening in the historically strong job market.
“I don’t see any reason why unemployment needs to rise to bring inflation down,” Yellen said on Thursday (Apr 25) in a live-streamed interview with Reuters. There’s no evidence that the labour market is so hot that wage pressures are a source of inflation, she said, assessing that jobs data are “in line with” a continuing downward move in inflation.
Yellen played down Thursday’s data showing a slowdown in economic growth, saying that “peculiar” elements had depressed the headline increase. The economy continues to fire on all cylinders, she said.
The biggest component of the increases in consumer prices has been housing costs, and “I have no doubt” that the contribution from this component will be falling over the coming year, Yellen said.
Rents have “stabilised and in some cases fallen,” in a shift that will be incorporated into the shelter component of the consumer price index over time, Yellen said.
The former Federal Reserve chief declined to comment on the prospect for interest-rate cuts, while noting that her successor Jerome Powell has indicated that policymakers need more evidence to become confident that inflation is on track to hit their 2 per cent target before easing policy. BLOOMBERG
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