White House, Treasury watching inflation closely, Yellen says
U.S. Treasury Secretary Janet Yellen said on Thursday she believes recent rise in inflation will prove temporary and that there is still slack in the economy, but that the White House, Congress, and Treasury are watching it close and have the tools to address it if needed.
“The recent inflation we have seen will be temporary, it’s not something that’s endemic,” Yellen told the House Appropriations Committee, noting that what’s driving it is a rebound from very low measures last year and shortages of materials. “I expect it to last several more months and to see high annual rates of inflation through the end of this year.”
Yellen says Biden budget raises U.S. debt-to-GDP ratio but is responsible
U.S. Treasury Secretary Janet Yellen said on Thursday that President Joe Biden’s fiscal 2022 budget request will increase the U.S. federal debt-to-GDP ratio above its current level of about 100% over the next decade.
But Yellen told a U.S. House of Representatives Appropriations subcommittee that Biden’s budget plans were fiscally responsible, partly because the real interest burden to finance the federal debt is currently negative because long-term Treasury yields of 1.6% are below a 2% inflation rate.
“We’ll have a temporary period of spending too and some of these increases, will - beyond the budget window - will result in lower deficits and more tax revenue to support those expenditures. I believe it is a fiscally responsible program,” Yellen said.
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