US Treasury Secretary Janet Yellen told Reuters on Saturday that new data showing the country’s inflation rose unexpectedly in January signaled that the fight against inflation was “not a straight line” and that it was more work needed.
In an interview with Reuters at the G20 financial leaders’ meeting in India, Yellen dismissed arguments by some economists that a recession or significantly higher unemployment would be needed for the Federal Reserve to win the fight against inflation, keeping the his view that inflation can be reduced while maintaining a strong labor market.
The strongest data on US consumer spending in nearly two years showed on Friday that the Fed’s favorite measure of inflation, the personal consumer price index (PCE), jumped unexpectedly in January, raising questions as to whether that the Fed continues to fall behind in its fight against inflation.
Revisions of past data showed earlier deflation had been milder than previously reported, and those data added to financial market fears that the Federal Reserve could continue to raise interest rates into the summer of 2016. northern hemisphere.
“I think this report has shown that it’s not going to be a straight line. Disinflation is not a straight line,” Yellen said, adding that inflation “remains a problem.”
“It’s a read, but core inflation remains above that consistent with the Fed’s target. So there’s still a lot of work to do,” Yellen added.
Source: Terra
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