Janet Yellen: "The US Is Not Yet in Disinflation"

U.S. Treasury Secretary Janet Yellen stated that the United States has not yet entered the disinflation phase (a slowdown in price increases) and that there is still much work to be done.

Attending the Group of Twenty (G20) Finance Ministers meeting held in Bengaluru, India, Secretary Yellen made these remarks during a media interview on the 25th (local time), referring to the January Personal Consumption Expenditures (PCE) price index increase.

Secretary Yellen said, "Core inflation remains above the Federal Reserve's (Fed) target level," adding, "There is still much work to be done."

However, she noted, "Since housing rents are still adjusting compared to the pandemic peak, inflation has decreased compared to last year, and this trend needs to continue," adding, "There is reason to expect inflation to decline further in the coming months."

Secretary Yellen maintained the position that it is possible to reduce inflation while maintaining a strong labor market in order for the Fed to win the fight against inflation.

She emphasized, "Lowering inflation driven by wage-price spirals like in the 1970s would require a recession, but that is not the case now," and added, "I believe it is possible to reduce inflation while maintaining a strong labor market."