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Treasury Secretary Janet Yellen warned during a CNN interview with Jake Tapper on Sunday that inflation would continue to remain late into next year.
"So let me ask you about that, because this rising inflation is hitting Americans' wallets hard, impacting everything from gas prices to groceries,"
Tapper said on CNN's "State of the Union."
"When do you expect the inflation to get back to the 2 percent range, which is considered normal?"
Tapper asked. "2022? 2023? When?"
"Well, I expect that to happen next year,"
Yellen responded. "Monthly rates of inflation have already fallen substantially from the very high rates that we saw in the spring and early summer. On a 12-month basis, the inflation rate will remain high into next year because of what's already happened. But I expect improvement by the end of - by the middle to end of next year, second half of next year."
Yellen later conceded that "we are going through a period of inflation that's higher than Americans have seen in a long time."
Biden Treasury Secretary Janet Yellen says rising prices will continue until "the end of next year."
In July, Yellen said it would only last "several months."
TRANSCRIPT PROVIDED VIA CNN:
JAKE TAPPER, CNN HOST: So let me ask you about that, because this rising inflation is hitting Americans' wallets hard, impacting everything from gas prices to groceries.
When do you expect the inflation to get back to the 2 percent range, which is considered normal? 2022? 2023? When?
YELLEN: Well, I expect that to happen next year.
Monthly rates of inflation have already fallen substantially from the very high rates that we saw in the spring and early summer. On a 12-month basis, the inflation rate will remain high into next year because of what's already happened.
But I expect improvement by the end of - by the middle to end of next year, second half of next year.
TAPPER: Second half of 2022.
Former President Obama's Treasury Secretary Larry Summers has been sounding alarm bells for months about rising prices. Take a listen to his response to what he calls very disturbing inflation numbers out last week.
(BEGIN VIDEO CLIP)
LAWRENCE SUMMERS, FORMER DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: Now we see inflation becoming more widespread in a wider range of products, spreading to the housing and labor markets.
I have been alarmed for a long time, and I'm more alarmed now.
(END VIDEO CLIP)
TAPPER: More alarmed now.
And Summers added this warning - quote - "We're in more danger than we have been during my career of losing control of inflation in the U.S."
Is he wrong?
YELLEN: I think he's wrong, I don't think we're about to lose control of inflation.
I agree, of course, we are going through a period of inflation that's higher than Americans have seen in a long time. And it's something that's obviously a concern and worrying them. But we haven't lost control.
And, as we make further progress on the pandemic, I expect these bottlenecks to subside. Americans will return to the labor force as conditions improve. And, remember, the spending that we did that partially has caused this high demand for goods, it's been very important in making sure that the pandemic hasn't had a scarring effect on American workers.
It's given them enough income and support to get through this without - while still being able to put food on their table and keep roofs over their heads.
YELLEN: And when you don't hear people talking about, I'm worried about being able to get a job, remember, that's a very good impact that the rescue packages had. And what we're talking about with infrastructure and Build Back Better, this is a relatively small amount of spending over a decade. And we need this spending to make our economy productive...
YELLEN: ... to make sure that families have the support to take care of their children and to work. And it will boost labor force participation.
TAPPER: So, Secretary Yellen, you referred to this earlier, but I want to ask you.
There's this record-breaking 4.3 million Americans who left their jobs just in August. It's a pandemic phenomenon some are now calling the Great Resignation. This comes as almost 11 million jobs are currently open and waiting to be filled.
What's going on here? Why are Americans not taking these jobs? And what are you and the White House doing to get people back to work?
YELLEN: Well, right now, we have a very tight labor market.
And when the labor market is tight and Americans feel good about their ability to get another job, they're more likely to quit a job. They're getting outside job offers and taking them. And that shows up in those statistics.
So we have a good, tight labor market. Firms are obviously having trouble hiring workers. But labor supply is depressed by the pandemic. That's because of health concerns, because of child care. And as we get beyond the pandemic, I expect labor supply to increase.
And I - it's good, I think, to see wages begin to rise, especially for those Americans who had the most insecure jobs and the lowest wages. And to see some improvement there is something that we should be pleased with.
TAPPER: You have projected that the U.S. is going to run out of money to pay its bills on December 3 unless Congress acts to once again raise the debt ceiling.
Senator Mitch McConnell says Democrats are going to have to do it alone. And so we just talked to Speaker Pelosi about whether or not they're going to do it with reconciliation.
What - how concerned are you that, ultimately, a default might actually happen this time?
YELLEN: Well, I consider it utterly essential that the debt ceiling be raised.
It's simply inconceivable that America should prove itself unwilling to pay the bills it's already incurred. And let's be clear. The debt ceiling is not about future spending or tax policy, on which members of Congress may disagree. It is about paying the bills that result from past decisions of Congress about spending and taxation.
It would be utterly catastrophic, something that has not ever happened in the history of America. Our assets, our treasuries are regarded as the safest assets on the planet, because America can be counted on, always has, to pay its bills.
I personally believe this is a responsibility that Republicans and Democrats should share.
YELLEN: I think it's something that both parties should do together.
It's a housekeeping matter, doing what's necessary to pay our bills. I have confidence it will get done, but I will leave it to the speaker and to Leader Schumer to figure out what the best way is forward on that.