WASHINGTON (AP) — Treasury Secretary Janet Yellen says that the economic recovery is going to be “bumpy” with high inflation readings likely to last through the end of this year.
But Yellen insisted that the inflation pressures will be temporary and if they do threaten to become embedded in the economy, the government has the tools to address that threat.
In testimony before a House Appropriations subcommittee Thursday, Yellen was asked about a big jump in prices reported last week, which showed consumer price index rising by 4.2% over the past year, the largest 12-month gain since 2008.
Yellen said that the April price increase was the result of a number of special factors related to the economy opening back up. She said as she has in the past that the price jump would be temporary but she indicated it would be more than a one-time gain.
“I expect it to last, however, for several more months and to see high annual rates of inflation through the end of this year,” Yellen told lawmakers.
“As the economy gets back on line, it is going to be a bumpy process,” Yellen said.
The high April inflation reading, Yellen said, reflected in part big gains in the pries of airline tickets, hotel rooms and recreation, all areas where prices had fallen dramatically after the pandemic hit the U.S. in March 2020.
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Source: Associated Press