During an interview with the Fox Business Network on Wednesday, Treasury Secretary Janet Yellen reacted to the February CPI and rises in inflation over the past three months by stating that she doesn’t “expect this to be a smooth path month to month, but the trend is clearly favorable.”
Fox Business White House Correspondent Edward Lawrence asked, [relevant exchange begins around 1:25] “So, we just got a CPI inflation report out, and it showed that it was hotter than expected, but if you go back and look at month over month, December, January, and February, it showed an increase of inflation. Is inflation coming back?”
Yellen responded, “Well, look, inflation is down almost two-thirds from the high it reached in 2022, and the trend is clearly a favorable one. I wouldn’t look at — expect this to be a smooth path month to month, but the trend is clearly favorable. That said, President Biden’s top priority is addressing the issue of high costs that concern so many Americans. They’re worried about their ability to make ends meet, and he’s doing all that he can, bringing down prescription drug prices, bringing down the cost of health care, and, of course, the investments that we’re making to promote renewables in the United States will make energy more secure and lower the cost of energy to households. In the State of the Union, the President also proposed ways to increase the supply of affordable housing and make housing more affordable for new homebuyers.”
Lawrence then asked, “But when you talk about prices, the CPI inflation has had a 3 in front of it since July of last year. Why is Jamie Dimon wrong, then, when he’s saying the worst case is stagflation?”
Yellen answered, “Well, I don’t think we’re going to see stagflation. Most forecasters believe we’re on a path where inflation will come down over time. The single biggest contributor to inflation is housing costs, and we can see, when we look at the market for new rental apartments, that, in many parts of the country, rental prices for new apartments have actually declined overall, flat to slightly down. It takes a while for that to filter into the CPI, and so, I have every expectation that the single largest contributor to it, to inflation, is going to be moving down over this year.”
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