U.S. Treasury Secretary Janet Yellen warned that U.S. inflation was “unacceptably high” and said reducing price increases would be Washington’s “top priority.”
Data released on Wednesday (13th) showed that US consumer price inflation rose to 9.1%, the highest level since 1981.
Yellen told a news conference ahead of a meeting of G20 finance ministers in Bali, Indonesia, “We support first and foremost what the Federal Reserve (Fed) is doing; they think it’s necessary to control inflation.”
“In addition to that, we are taking our own steps to support lower inflation in the short term, especially the work done on energy prices and the Strategic Petroleum Reserve,” she said.
“There are also efforts we are doing to put a cap on Russian oil prices and avoid possible future price spikes,” she added.
Yellen added that in the latest inflation data, almost half of the price increases came from high energy costs.
Asked whether reducing inflation was more important than the risk of recession from higher interest rates and slower growth, Yellen said she thought it would be appropriate to lower inflation as a priority when the labor market is “very strong right now.”
However, she also said that higher interest rates could have spillover effects on other economies.
A strong dollar would make other currencies relatively weak, but could also make their exports cheaper and more attractive.
“On the one hand, it can increase export capacity, which is good for their growth,” she said. “On the other hand, if the country has dollar-denominated debt, it makes those already very serious debt problems more difficult. “
