Treasury Secretary Yellen: Inflation control depends on pandemic control

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Treasury Secretary Janet Yellen during a press conference in Dublin, Ireland, November 1, 2021 (Clodagh Kilcoyne / Reuters)

Secretary of the Treasury Janet Yellen blamed the COVID-19 pandemic for the record inflation the rise the US is seeing and has said the country must continue to “make progress” against the pandemic to keep inflation in check.

CBS Take on the nation host Margaret Brennan asked Yellen in a pre-recorded interview broadcast on Sunday if she is confident that the price of consumer goods will return to normal levels by next November.

The treasury secretary replied that “it really depends on the pandemic”.

“The pandemic has laid down the law for the economy and for inflation. And if we want to bring inflation down, I think that continuing to make progress against the pandemic is the most important thing we can do. I think it’s – is – it’s important to realize that the cause of this inflation is the pandemic, ”Yellen said.

Yellen’s comments come after the Department of Labor released a report last week showing inflation hit a 31-year high.

He said the pandemic caused inflation to spike because it “nearly stalled our economy” and “led to a dramatic increase in demand for products.”

“The pandemic is really responsible, in its impact, for the inflation we are seeing,” he said.

“Families were unable to spend on services: eating out and traveling. They moved while they stayed at home, worked more from home. They shifted their spending into goods which led to an increase in demand for products. And although the supply of products has increased in the United States and around the world, not as much as the demand, “added Yellen.

He predicted that prices could return to normal levels in the second half of next year if the US is “successful with the pandemic.”

Meanwhile, National Economic Council director Brian Deese said on Sunday that he and President Biden were not wrong months ago when they downplayed inflation as a short-term problem caused by the pandemic.

CNN’s Jake Tapper asked Deese if he and Biden were wrong in saying that inflation is a “short-term problem ‘it gets up a little and then comes back'”, especially after Biden finally acknowledged this week that inflation is “worrying”.

“No, I don’t think so, Jake,” Deese replied. “I think what we have consistently said is that the pandemic and the economy are intertwined and we certainly saw that just as the Delta variant posed real health challenges to the economy, it also had an economic impact.”

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