Yellen Predicts Continual Decline in Inflation
US Treasury Secretary Janet Yellen expressed her confidence in the declining trend of inflation during an interview with CNBC. According to Yellen, there is still progress to be made for the Federal Reserve to achieve its 2% inflation objective. However, she believes that by the end of 2024, inflation will stabilize within the desired range.
Economic Growth and Consumer Confidence
Yellen also discussed the US economy’s overall stability, explaining that the job market’s recent turbulence has settled down. She foresees a soft landing for the economy and a reasonable chance of continued growth in 2024. Although she does not consider the risk of a recession to be particularly high, Yellen acknowledged that consumers are still mindful of rising rents and prices for various items.
Nevertheless, she shared positive news regarding consumer confidence, citing a recent survey that indicated an increase in confidence levels among Americans. Yellen expects people’s perception of the economy to improve gradually as inflation subsides and real earnings rise. In addition, she highlighted the halt in rental cost increases and the decrease in gasoline prices, offering a silver lining for consumers.
Monetary Policy and Interest Rates
As a former Federal Reserve chair, Yellen expressed her trust in the central bank’s ability to handle monetary policy. She also stated that it would be natural for interest rates to decrease as inflation declines. Ultimately, she left the decision-making regarding interest rates to the Federal Reserve, emphasizing their expertise in navigating economic matters.
Yellen concluded by stating that two potential risks to consider are inflation not returning to the Fed’s target range as planned and the possibility of an overly weak economy. However, she expressed her confidence in the Federal Reserve’s judgment to make the right choices in response to these challenges.
With Yellen’s positive outlook on inflation and the economy’s future, she remains hopeful about the overall stability and growth prospects of the United States.