Yellen: Trump’s 'NATO Attack Encouragement' Remarks Threaten Global Economy

"CPI Inflation Shows Progress in Reduction"

U.S. Treasury Secretary Janet Yellen criticized former President Donald Trump's recent bombshell remarks encouraging NATO member countries to allow Russia to attack them, calling it a threat to the global economy.

On the 13th (local time), Secretary Yellen stated in an interview with Bloomberg News, "The NATO alliance is absolutely critical to our defense." She also pointed out, "I think the statements former President Trump made about NATO are irresponsible."

Janet Yellen, U.S. Secretary of the Treasury [Photo by Yonhap News]

On the 10th, during an election campaign rally, former President Trump said, "Even if Russia attacks, I will not protect NATO allies who do not pay their defense costs," adding, "Instead, I would encourage Russia to do whatever it wants." NATO member countries are required to spend at least 2% of their Gross Domestic Product (GDP) on defense annually, but last year only 11 out of 31 countries met this standard. On the 12th, he also threatened on social media that "the U.S. provides much more support to Ukraine than Europe does," saying, "If NATO is not equal, the U.S. comes first."

Secretary Yellen stated that former President Trump's remarks undermine NATO's joint efforts for Ukraine and NATO's broad efforts to promote economic growth for geopolitical stability. She said, "(Such remarks) will likely raise doubts among allies about how long the U.S. commitment to NATO will last," adding, "NATO has proven to be very important for the stability of the global economic system and our mutual defense."

On the same day, the U.S. Department of Labor announced that the Consumer Price Index (CPI) for January rose 3.1% compared to the same month last year. The market had expected the January CPI increase rate to fall into the 2% range for the first time in two years and ten months, but those expectations were dashed. The Federal Reserve (Fed) has stated that more evidence is needed to show that inflation is steadily declining to the 2% target before considering interest rate cuts.

Referring to the Fed's 2% target, Secretary Yellen said, "We can see from the data that there is steady progress in lowering inflation in line with the Fed's goal."

Notably, two-thirds of the January CPI increase was due to housing costs. Secretary Yellen commented, "While rent costs have somewhat stabilized and even decreased in some areas, it takes time for the CPI to reflect housing costs."

Secretary Yellen also emphasized the continued strength of the U.S. economy and labor market. She said, "The recession that many experts predicted would occur during the inflation slowdown has not yet materialized," adding, "Americans are currently benefiting from wage increases that exceed inflation."

Earlier, U.S. President Joe Biden also strongly criticized former President Trump's remarks during a speech at the White House urging the House of Representatives to pass the security budget, calling them "stupid, shameful, dangerous, and un-American."

President Biden said, "Can you imagine a former U.S. president saying something like this? The whole world heard those words." He added, "No president in our history has ever bowed to a Russian dictator. Let me be clear: I never will."