Miami, Nov 14 (EFE).- Treasury Secretary Janet Yellen on Sunday blamed the current US inflation rate to the generalized crisis caused by the coronavirus pandemic and said that she expects the situation to stabilize within a year, although this depends on how the pandemic evolves.
In an interview broadcast on Sunday by CBS, Yellen said that she believed that prices will return to their “normal” levels sometime during “the second half” of next year.
For that to occur, she said, the labor supply and employer demand will both have to stabilize and the country will have to get out of the ongoing health emergency that began in March 2020.
“When the economy recovers enough from COVID … people go back to eating out, traveling more, spending more on services, and the demand for products, for goods begins to go back to normal,” she said.
Annualized inflation in the US shot up in October to 6.2 percent, a figure not seen in 30 years but caused in part by the confluence of strong consumer demand and supply chain problems, both on the national and global levels, caused by the pandemic.
The treasury secretary said that “It’s important to realize that the cause of this inflation is the pandemic.”
“It led to a dramatic increase in demand … for products,” she continued. “And although the supply of products has increased in the United States and globally, not as much as demand.”
“The pandemic has been calling the shots for the economy and for inflation,” Yellen said during the interview. “And if we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do.”
She explained that, due to temporary mobility and leisure location access restrictions, household spending has adjusted itself.
In October, consumer prices rose 0.9 percent over September, according to figures published last Wednesday by the Office of Labor Statistics, which said that this is the fifth consecutive month that annualized inflation in the US has been above 5 percent.
Yellen agreed on that diagnosis with Federal Reserve Chairman Jerome Powell, who said last week that the higher inflation figure was due to “transitory” factors and estimated that the price rises will begin “to moderate” in the second or third quarter of 2022.
But Yellen did not completely agree with that assessment and, when asked if inflation will have normalized by the time of the November 2022 mid-term elections, she replied that this is not so much under the control of the government but rather due to how the coronavirus pandemic progresses.