Yellen Sees Turnaround of Supply Chains in Recent Inflation Data

Janet Yellen, U.S. Treasury secretary, speaks at a news conference
Janet Yellen, U.S. Treasury secretary, speaks at a news conference during the 2022 meetings of the International Monetary Fund and World Bank Group in Washington, D.C. (Ting Shen/Bloomberg News)

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Treasury Secretary Janet Yellen welcomed the most recent U.S. inflation figures, saying some of the most important price pressures over the past two years had begun to decline significantly.

In addition to lower energy prices, “goods prices have actually been falling, and some of the supply chain issues that pushed up the prices of goods and commodities, those have really turned around,” Yellen said in an interview with National Public Radio aired on Jan. 13.

The Treasury chief noted that indexes for rent had continued to rise, but added, “we see those coming down substantially over the next six months or so.”

Consumer prices in the U.S. rose by 6.5% in December, the lowest year-on-year increase since October 2021, according to Bureau of Labor Statistics data published Jan. 12. More encouraging, prices increased just 0.9% in the second half of the year, which translates into an annualized inflation rate of about 1.9% since the end of June — down from above 11% in the first half of 2022.

Yellen repeated her belief that it’s possible for the Federal Reserve to bring inflation down to its 2% target without triggering a substantial increase in unemployment — but didn’t say how likely she thought that outcome is.

“There is a path there that makes that possible,” she said.

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