Latest News by Industry
%2Fcloudfront-us-east-2.images.arcpublishing.com%2Freuters%2FIYMG4JVWUFPIHMSMVARH4AXWMM.jpg&w=1200&q=75)
• Yellen said almost all developed countries worldwide are facing high inflation, so it is not due to Biden’s COVID-19 spending bill
• Supply and demand disparities during the pandemic, severe supply chain disruptions, and Russia-Ukraine war is pushing inflation higher
US Treasury Secretary Janet Yellen on Tuesday said the country is facing “unacceptable levels of inflation”, and an appropriate budgetary stance is needed to help reduce pricing pressures without undermining the economy.
At a Senate Finance Committee hearing, Yellen pushed back against Republican claims that the inflation, which has already reached 40 years high, was caused by Democratic President Joe Biden’s $1.9 trillion American Rescue Plan (ARP) COVID-19 spending bill last year.
“We’re seeing high inflation in almost all of the developed countries around the world. And they have very different fiscal policies,” Yellen said.
“So it can’t be the case that the bulk of the inflation that we’re experiencing reflects the impact of the ARP.”
Yellen said most of the inflation is caused by supply and demand disparities, including high demand for goods over services during the pandemic and severe supply chain disruptions.
Moreover, the increase in energy and food prices is caused by Russia’s invasion of Ukraine, which has also pushed inflation higher, she added.
“We currently face macroeconomic challenges, including unacceptable levels of inflation as well as the headwinds associated with the disruptions caused by the pandemic’s effect on supply chains and the effects of supply-side disturbances to oil and food markets resulting from Russia’s war in Ukraine,” Yellen said in prepared remarks.
Treasury Secretary also insisted that addressing inflation is the top priority of the Biden administration and said that the proposed social and climate legislation could help lower costs, including prices of prescription drugs and clean energy initiatives.
Picture Credit: Reuters
ALSO READ: