US Treasury Secretary Yellen Expresses Regret Over Inflation Commentary

US Treasury Secretary Janet Yellen has admitted to feeling regret over her previous statements regarding inflation. According to Reuters, Yellen acknowledged that her past remarks on inflation were incorrect, expressing regret over characterizing it as transitory, despite indications of a downward trend, as many interpreted this statement as implying a short duration.

The US February inflation data was released on Tuesday. According to the report, the US Consumer Price Index (CPI) for February rose by 3.2% on a yearly basis, surpassing expectations and the previous month’s figures. The core CPI, which excludes food and energy prices, also showed an annual increase of 3.8%. Following the CPI data, Producer Price Index (PPI) data will be closely monitored in the US today.

Yellen also touched upon policy interest rates in her speech, stating that it is unlikely for interest rates to return to pre-pandemic levels. Responding to questions about why expectations for interest rates were significantly higher in White House projections compared to the previous year, the Treasury Secretary stated that the new figures in the projection are consistent with private sector forecasts. Yellen remarked, “I believe this reflects current market realities and the forecasts we see in the private sector. It doesn’t seem very likely that yields will be as low as they were before the pandemic.”

The Treasury Secretary’s expression of regret over her inflation commentary and expectations regarding interest rate policy have drawn investors’ attention to the future trends of the US economy. The impact of Yellen’s statements on the markets will be closely monitored.

source: prepared by Melisa Beğiç

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