Fighting record inflation remains a top priority for the Biden administration, Treasury Secretary Janet Yellen said Monday, addressing growing concern about the state of the US economy ahead of the midterm elections.
“Let me be very clear: inflation in the United States is still too high,” Yellen said during prepared remarks at the annual meeting of the Securities and Financial Markets Industry Association. “Our administration’s top economic priority is to get it under control. We recognize that the Federal Reserve bears the primary responsibility, but we are taking a wide range of complementary actions to reduce costs.”
His comments come just two weeks before the midterm elections, in which Democrats are expected to lose their narrow majority in the House and possibly the Senate as well as a result of painfully high inflation.
Inflation and the economy in general remain top issues for most voters, according to a recent study. New York Times/Siena College Survey. A separate CNBC poll showed that a majority of registered voters (42%) think Republicans will be more successful in controlling inflation than Democrats (27%).
The White House has been accused of grossly misjudging the inflation problem, with President Biden and other top officials insisting that high inflation was “transient,” a byproduct of COVID-induced disruptions to the global economy, even as it became clear that the increase would increase. last longer than expected.
In recent weeks, the White House has sent Yellen to sell Biden’s economic agenda and tout post-pandemic recovery, despite skyrocketing inflation.
On Monday, he stressed that despite “serious global headwinds,” including the Russian war in Ukraine, rising energy prices and the lingering effects of the pandemic, the US economy remains “significantly strong.” “.
“Our economic plan will strengthen our resilience to global shocks,” he said.
The Labor Department reported earlier this month that inflation rose 0.4% in September from the previous month and 8.2% year over year. Those numbers were higher than the 8.1% headline figure and 0.2% monthly increase forecast by Refinitiv economists, a worrying sign for the Federal Reserve as it seeks to cool price gains and tame consumer demand with an aggressive campaign to raise interest rates.
In an even more worrying development that suggests underlying inflationary pressures As the economy remains strong, core prices, which strip out the more volatile measures of food and energy, rose 0.6% in September from a month earlier. Since the same time last year, core prices have risen 6.6%, the fastest since 1982.
The data all but assured that the US central bank will approve another 75 basis point interest rate hike, the fourth of its kind, when it meets on November 1-2. Rising interest rates threaten to trigger an economic downturn by forcing businesses, and ultimately consumers, to cut back on spending.