Yellen expects inflation to persist, then subside later in 2022

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She cited health and child care issues as two reasons “many businesses are experiencing a labor shortage”. And the Covid-19-related closures in Asia have had an impact on the importation of goods, she said, including a semiconductor shortage that has pushed up used car prices and a reduction in the production of new cars.

“These are temporary pains that result from a Covid economy,” Yellen said.

Still, the Treasury Secretary has said she expects conditions to improve and supply bottlenecks to ease. And she credited the US bailout passed in March for giving Americans “enough income and support to get through this while still being able to put food on their tables and keep roofs over their heads. “.

“As we emerge from the pandemic, I expect the supply of labor to increase,” Yellen said. “It’s good, I think, to see wages start to rise, especially for Americans who had the most precarious jobs and the lowest wages. To see some improvement, there is something we should. be satisfied. “

The Treasury Secretary also reiterated the need for Congress to raise the debt ceiling. The United States is expected to default on its debt around December 3, unless Congress takes action.

Yellen reiterated that a default would be “utterly catastrophic” and threaten the viability of US assets, which she said are considered “the safest on the planet.”

Yellen said she would leave it to Speaker of the House Nancy Pelosi and Senate Majority Leader Chuck Schumer to raise the debt ceiling, adding that she said Republicans and Democrats shared the responsibility. .

Yellen also noted that raising the debt ceiling was meant to ensure that the United States could pay for its past spending and borrowing decisions, not future ones.

Earlier on the CNN show, Pelosi again appeared open to Democrats alone to raise the debt limit through reconciliation if Republicans remained united in opposition.

“It’s a path,” Pelosi said. “But we still hope to have a two-party system.”

Enough Republicans in the Senate backed the temporary increase in the debt limit earlier this month to bypass the reconciliation process and ensure that a default does not occur until December.

Pelosi said failure to raise the debt ceiling could have “consequences that could last for decades,” including millions of jobs lost. And she underscored her grievance that most of that debt accumulated under then-President Donald Trump and that Republicans raised the debt ceiling when he was president.


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