US Treasury Secretary Janet Yellen said she’s encouraged by progress on inflation, with energy prices and supply-chain issues easing across the globe even as the US labor market remains strong.
(Bloomberg) — US Treasury Secretary Janet Yellen said she’s encouraged by progress on inflation, with energy prices and supply-chain issues easing across the globe even as the US labor market remains strong.
“We’re seeing those supply-chain problems significantly mitigate, inventories are being built, shipping costs have come down,” Yellen told reporters after visiting a community health center in Lusaka, Zambia’s capital. “And so that part of inflation is no longer really contributing very significantly.”
Several measures of inflation have shown encouraging signs in recent weeks, including declines in the consumer price index, which fell to 6.5% in the year through December, off its high of 9% in June. Producer prices have also declined faster than expected.
In response, Treasuries have surged, with investors betting the Federal Reserve will stop raising rates and begin reducing borrowing costs sooner than policymakers are currently projecting.
Yellen also said that goods prices moved down late in 2022 and that she expected housing inflation — a particularly strong contributor to price pressures in the second half of the year — to cool by mid-2023.
“Over the next six months, that should largely cease boosting US inflation,” she said. “I do think in the US we’re continuing to see a strong labor market and progress on inflation. And so those are very helpful signs.”
Yellen is on a three-stop Africa trip aimed at boosting US ties with the continent. She’s set to hold discussions later Monday with Zambian President Hakainde Hichilema, with the country’s debt woes being the central focus.
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