Yellen: Covid-19 incentives may have contributed ‘some’ to inflation

In her interview with CNBC, Yellen said that the inflation rate has fallen and is now quite close to the US Federal Reserve’s (Fed) target.

Reminding that there was an “out of control” epidemic at the beginning of US President Joe Biden’s administration, Yellen stated that the unemployment rate increased during that period.

“We saw people lining up at food banks to feed their families, and spending money to alleviate that pain was really important,” Yellen said. he said.

“In general, it was a supply-side phenomenon.”

When asked whether the spending on incentives during the Covid-19 epidemic triggered inflation, Yellen said: “It may have contributed slightly, but overall inflation was a supply-side phenomenon.” made his assessment.

Yellen stated that there were major supply chain problems during the epidemic period and there were shortages of critical products in demand, and said, “I think the important factor in inflation was that these shortages started to raise prices very much.” he said.

Yellen also stated that the labor market has cooled but is in good shape, and that strong data show that interest rates may remain higher than expected.