U.S. Treasury Secretary Janet Yellen said on Thursday that she expects higher inflation to continue until the end of the year before coming down again.
Speaking at a siding held by the U.S. Housing Allocation subcommittee, Yellen expressed her view that the recent rise in inflation is temporary in nature.
Earlier, the consumer price index (CPI), which measures the inflation rate, was reported to have increased by 0.8% in April, and 4.2% in 12 months, the fastest annual rate since 2008.
Subsequently, concerns over this rising inflation have been voiced by several individuals who are not only policymakers from the Federal Reserve (Fed), but also the Republican party cited as the reason why they oppose President Joe Biden’s massive spending plan.
Larry Summers, a former top economic policymaker during the Clinton and Obama administrations, has also raised concerns about inflation and suggested that some of the pressure could be relieved by paying for infrastructure spending using funds from coronavirus aid.
In the meantime, Yellen also added that the Covid-19 pandemic crisis has caused major changes in spending patterns.
The high inflation figures in April partly reflected the rebound in prices in some sectors such as tourism and aviation which fell sharply last year.
