House prices, the main driver of inflation in the US, are expected to fall this year, helping the country escape inflation and recession.
Speaking in an interview with Fox Business , Treasury Secretary Janet Yellen said the US will not fall into stagflation (inflation with recession), a phenomenon in which the consumer price index remains high for a long time, accompanied by high unemployment and slow economic growth.
Forecasters say inflation will cool as house prices - the main driver of the phenomenon - cool this year.
In many parts of the country, new apartment rents have generally fallen, Ms. Yellen said. The Treasury secretary’s comments came after JPMorgan Chase CEO Jamie Dimon left open the possibility of stagflation.
Secretary Janet Yellen also admitted that she was wrong when she said earlier that inflation in the US was only temporary. In fact, the US authorities need more time than initially predicted, several weeks or months, to cool prices.
The US consumer price index has eased significantly from its mid-2022 peak, but the pace of price increases remains well above the Federal Reserve’s 2% target. It rose 0.4% in February from the previous month and 3.2% in the same month last year, both above analysts’ forecasts and higher than January.
In recent weeks, Fed officials have signaled that interest rate cuts are on the way this year, but have been cautious about ending the fight against inflation too soon. In congressional testimony last week, Fed Chairman Jerome Powell reiterated those concerns, but said he was “not far away” from easing.
With consumers spending more on credit cards but depleting some of their savings, Ms. Yellen said this is normal rather than a worrying new trend.
Regarding the position of the dollar, the US Treasury Secretary said that no currency can compete with the USD in terms of liquidity, legality and depth of financial markets.
Duc Minh ( according to AFP, Reuters )
Source link
Comment (0)