Treasury Secretary Janet Yellen is apparently rethinking her approval of higher inflation, which was extinguished at great pain the the U.S. economy decades ago.
According to the Washington Examiner:
Treasury Secretary Janet Yellen said that her comments about higher inflation throughout the rest of the year are being misinterpreted.
After the G-7 meeting in London, where plans for a 15% global minimum tax were announced, Yellen said that inflation could be a point higher than the Federal Reserve’s goal for the rest of the year, remarks that drew headlines.
“We have, in recent months, seen some inflation, and we, at least on a year-over-year basis, will continue, I believe, through the rest of the year, to see higher inflation rates, maybe around 3%,” she said. “But I personally believe that this represents transitory factors.”
Yellen further said in an interview with Bloomberg that such a scenario would be a welcome one.
“If we ended up with a slightly higher interest rate environment, it would actually be a plus for society’s point of view and the Fed’s point of view,” she said.
Yellen tried to walk those comments back on her flight back to the United States. She told the New York Times that while she thinks inflation will be high for the next few months, it will settle back down to the Fed’s 2% target.
She also downplayed the possibility of negative effects from the increase in prices. “I don’t see any evidence that inflation expectations are getting out of control,” Yellen said.