Yellen: Expect monthly inflation to reach the Fed’s target by the end of the year

Spark Global Limited reports:

Us Treasury Secretary Janet Yellen said month-on-month price growth would be running at a level consistent with the Fed’s target by the end of the year, even if year-on-year data continued to show uncomfortably high inflation.

Speaking to reporters Wednesday in Atlanta after holding several local meetings and events, Ms. Yellen said year-over-year price increases would be higher ‘for some time.’ “But my expectation is that by the end of the year, month-on-month increases will have fallen to levels consistent with the Fed’s interpretation of price stability.”

Spark Global Limited reports:

Spark Global Limited reports:

Ms Yellen’s comments suggest that month-on-month price growth will return to 0.1 or 0.2 per cent by December. The Fed’s inflation target is for the Commerce Department’s price index for personal consumption expenditures to rise an average of 2% over time. The index rose 4% in June from a year earlier, the fastest pace since 2008.

Ms. Yellen reiterated the Biden administration’s view that the inflation surge reflects economic bottlenecks and the challenges associated with the reopening. “I believe this is temporary and inflation will return to normal levels in the near future,” she said.

Yellen said the Treasury Department is working with state and local governments to provide the necessary technical assistance to accelerate states’ slow efforts to secure billions in rent assistance.

“We’ve made every effort to streamline the paperwork and the process so that it’s easier for state and local governments to start these programs, and it’s easier for individuals to qualify,” Yellen said.

“It’s a whole new infrastructure,” she added. “The delay is partly a reflection of the difficulty they have getting new things started.”

State and local governments have paid less than 10 percent of the $47 billion in federal rent assistance nationwide. The CENTERS for Disease Control and Prevention (CDC) on Tuesday extended evicting bans for tenants in areas of the country with high levels of transmission and high levels of the Novel coronavirus.

Asked if the Biden administration wanted Congress to act on the deportation ban, Yellen did not answer directly, but suggested that the CDC order would suffice. “I think the fact that the CDC took action is important.” She said.

Yellen’s visit to Atlanta to push the Biden administration’s spending plans also included private meetings with executives including Delta Air Lines (Dal.us) and Coca-Cola (KO.us), as well as public discussions with Latin American small-business owners.