DETROIT (WWJ) — U.S. Treasury Secretary Janet Yellen says despite Tuesday’s inflation report that sent Wall Street into a one-day retreat, the economy is “very strong.”
Speaking at a Detroit Economic Club luncheon alongside Gov. Gretchen Whitmer Wednesday at Huntington Place, Yellen said inflation is “coming back down to normal levels where it’s not an issue to most people.”
The luncheon was one of three stops on Yellen’s visit to Detroit touting the Biden Administration’s economic agenda, including three key pieces of legislation passed in recent years — the Inflation Reduction Act, Bipartisan Infrastructure Law, and CHIPS and Science Act.
Federal data released Tuesday showed the consumer price index rose .3% from December to January, up from a .2% increase the month prior. Prices are up 3.1% from a year ago, still above the Federal Reserve’s target of 2%, according to a report from The Detroit News.
Those numbers led to Wall Street posting its biggest one-day percentage drop in nearly a year on Tuesday, though the stock market was rebounding a day later.
“I think it is a tremendous mistake to focus on minor fluctuations and fail to see the longer term and bigger trend,” Yellen said. “And the trend here is that inflation is moving decisively down.”
Yellen on Wednesday pointed to the Inflation Reduction Act and American Rescue Plan as factors that have helped the economy, especially in Michigan.
Yellen said prices of “familiar goods we were shocked to see” rise sharply — including eggs, cars and televisions — have started coming back down. She also said gas prices have dropped by $2.
Overall, Yellen said, 2024’s economic outlook is still looking “robust," citing unemployment numbers and wage increases.
“We have a labor market that is the envy of the world. We have a string of national unemployment readings that are under 4% for the longest string of time in 50 years. People can feel comfortable about the job market,” she said.
Yellen was also scheduled to visit Michigan Central, Ford’s mobility campus in Corktown, and tour mobility startup Newlab, followed by a roundtable with Sen. Debbie Stabenow.
In a response to Yellen's trip to Detroit, West Michigan Republican Congressman John Moolenaar released a statement saying Yellen and Biden's policies "have hurt Michigan seniors, families and small businesses with higher prices, record inflation and burdensome regulations."
"Unfortunately, nothing Secretary Yellen says today in Michigan will make life easier for Michigan residents who are paying more for everything they buy,” Moolenaar's statement said. “Secretary Yellen misled Americans when she said inflation would be transitory and disappear quickly. She has no credibility on the economy now.”