The decade's most triggering comedy
The senior Biden administration official and former chair of the Federal Reserve said during an interview with CNN that inflationary pressures are lessening as policymakers increase the target federal funds rate, a measure that increases borrowing costs for businesses and consumers.
“I would say, ‘So far, so good.’ Obviously there are risks, and the global situation we face is very uncertain,” Yellen remarked, expressing optimism that central bankers can protect the strong labor market and decrease inflation without inducing a recession. “There can be shocks from it. But look, inflation still is too high, but generally if you look over the last year, inflation has been coming down. And I know the Fed is committed to continuing the process of bringing it down to more normal levels, and I believe they’ll be successful with it.”
Inflation was charted at 1.4% when President Joe Biden was inaugurated in January 2021. After reaching a height of 9.1% in June 2022, the most recent readings from the Bureau of Labor Statistics indicate that price levels are increasing at a 6.4% rate as of January 2023. The somewhat lower headline metric comes despite stubborn cost pressures in categories such as shelter and food: expenses for food at home increased 11.3% between January 2022 and January 2023, while costs for food away from home rose 8.2% over the same period.
Rising price levels have applied pressure to household budgets as purchasing power continues to decline. Real wages, which account for inflationary pressures, decreased 1.5% between January 2022 and January 2023, according to data from the Bureau of Labor Statistics.
Biden responded to another recent inflation data release by contending that “we have made progress on inflation, but we have more work to do.” He touted efforts from his administration to reduce prices and said Republicans undermine the economy by opposing his spending agenda.
“When I travel the country, I see optimism for this year and the years ahead. The optimism of families with just a little bit more breathing room thanks to our work to get workers back into jobs. The optimism of a record number of Americans applying to start a small business,” the commander-in-chief said in a statement from the White House. “But the fight is not over. We must finish the job in transitioning to stable and steady growth that benefits all Americans, while laying the foundation for strong and shared growth for years to come.”
Yellen delivered her remarks to CNN from Ukraine, where she made an unannounced visit to discuss economic assistance packages meant to fund the war-torn nation’s government during its conflict with Russia. The federal government allocated more than $113 billion in combined humanitarian and military assistance for Ukraine last year, according to an analysis from the Committee for a Responsible Federal Budget.
The United States and other Western nations have meanwhile imposed a variety of economic sanctions on Russia. “We will see an increasing toll on Russia’s economic trajectory over time,” Yellen commented. “And their ability to replenish the military equipment that’s been destroyed in their attacks on Ukraine, that’s been very greatly jeopardized.”