Inflation is currently one of the top concerns facing the U.S., and it isn’t expected to go away anytime soon, as Treasury Secretary Janet Yellen said Tuesday the inflation rate is expected to remain high.
Yellen made the comments during a Senate testimony and added that the Biden administration is now forecasting inflation will average 4.7% this year.
“I do expect inflation to remain high, although I very much hope that it will be coming down now,” Yellen said.
Currently, inflation is at the highest it’s been in decades, and Yellen shared that projections are not “locked-in” and are “likely to be higher.”
Yellen’s testimony was given before the Senate Finance Committee on Tuesday before she speaks with the House Ways and Means Committee on Wednesday, where she will talk about the administration’s budget requests.
The Treasury Secretary faced several questions about rising prices as the rate of inflation sits above 8%. Yellen responded that the Biden administration has made the issue its top economic priority.
In a recent Wall Street Journal poll, 83% of Americans shared that they view the economy as poor, mainly due to inflation causing a rise in prices for things like groceries and gasoline.
Another poll from ABC News found that only 37% of Americans approve of how Biden is handling the economy.
Addressing her comments from 2021 that inflation would soon ease, Yellen admitted she was wrong during a television appearance last week.
During the hearing, Republicans grilled Yellen for the 1.9 trillion COVID-19 relief package that they blame for the rapid inflation. Still, she defended the legislation — the American Rescue Plan — on Tuesday, saying it was a driving force in economic recovery.
“I believe that ARP played a central role in driving strong growth throughout 2021 and afterward, with the United States real GDP growth outpacing other advanced economies and our labor market recovering faster relative to historical experience,” she said.
No matter what happens, inflation is set to be a central talking point during the midterm elections, and some feel it could cost the Democrats control of the House and Senate.
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