HERNDON, Virginia (Reuters) – Inflation is not becoming a permanent part of the U.S. economic picture, Treasury Secretary Janet Yellen told reporters Friday, addressing a growing concern that high prices could be here to stay for Americans.
“I don’t believe it’s becoming embedded in the U.S. economy,” she said, when asked about recent consumer and producer price reports which showed persistent price gains.
“The way inflation would become embedded is if you saw expectations of inflation over the medium term rising to levels that are inconsistent with 2% inflation, and then those higher inflation expectations being built into wages and prices.”
Yellen said while recent data showed more needs to be done to bring inflation down, she did not believe it was entrenched. That was one of the reasons why she “continues to believe that there is a path to lowering inflation while maintaining a strong labor market,” she said.
Yellen added that she saw some costs, including production and shipping costs, coming down.
(Reporting by David Lawder; Writing by Heather Timmons; Editing by Andrea Ricci)
