The high inflation that occurred in several developed countries or emerging markets should not be underestimated. If left unchecked, the world will be badly affected financially for the next decade.
One of the high inflation rates occurred in the United States and although it fell slightly, it has not shown significant signs of slowing down.
The sticky inflation has also become a scourge among investors and is feared to last for a long time.
However, US Treasury Secretary Janet Yellen has a different view. Yellen said on Wednesday that it would not be a problem for a decade for the United States and that the Biden administration’s massive spending on its COVID-19 rescue (economic stimulus) program contributed “slightly” to the rise price.
Yellen, answering questions from US lawmakers about high inflation for the second straight day, said that recent readings above 8% are “unacceptable” and the 2% inflation target is “the right target” for the Federal Reserve.
Yellen was responding to a question about why some economists see it as a more entrenched problem that could plunge millions of retirees who depend on fixed incomes into poverty.
“I don’t see how it lasts for a decade … that could be a problem,” Yellen told the US House of Representatives Ways and Means Committee.
Yellen on Tuesday told the Senate Finance Committee that high inflation is likely to persist – although she hopes it will subside soon – and that the Biden administration is likely to increase its budget forecast for inflation to 4.7% for the year.
Yellen last week said she was “wrong” in her assessment last year that it would be more transient and could fall quickly.
Republicans in the House, like their Senate counterparts, have repeatedly asked him whether the Biden government’s $1.9 trillion aid, known as the American Rescue Plan, is the root cause of high inflation.
Defending the current administration’s decision, Yellen called the spending a huge help to the American public and that even in the worst conditions the stimulus was only a “minor contributor to inflation.”