During an interview with the Fox Business Network on Wednesday, Treasury Secretary Janet Yellen reacted to the February CPI and rises in inflation over the past three months by stating that she doesn’t “expect this to be a smooth path month to month, but the trend is clearly favorable.”
Fox Business White House Correspondent Edward Lawrence asked, [relevant exchange begins around 1:25] “So, we just got a CPI inflation report out, and it showed that it was hotter than expected, but if you go back and look at month over month, December, January, and February, it showed an increase of inflation. Is inflation coming back?”
Lawrence then asked, “But when you talk about prices, the CPI inflation has had a 3 in front of it since July of last year. Why is Jamie Dimon wrong, then, when he’s saying the worst case is stagflation?”
Yellen answered, “Well, I don’t think we’re going to see stagflation. Most forecasters believe we’re on a path where inflation will come down over time. The single biggest contributor to inflation is housing costs, and we can see, when we look at the market for new rental apartments, that, in many parts of the country, rental prices for new apartments have actually declined overall, flat to slightly down. It takes a while for that to filter into the CPI, and so, I have every expectation that the single largest contributor to it, to inflation, is going to be moving down over this year.”
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