U.S. Treasury Secretary Janet Yellen (Janet Yellen) said in an interview on Tuesday (May 4) that the Biden administration has increased spending to revive the economy, interest rates may also need to be raised accordingly, but then she clarified the comments made earlier on raising interest rates, while the Federal Reserve believes that the U.S. inflation trend is still unclear for the time being.
According to NBC Business Channel (CNBC), Yellen said at an economic seminar held by The Atlantic Monthly: “Although the additional government spending is relatively small relative to the size of the economy, it could lead to some very modest upward adjustments in interest rates. “
Yellen’s speech caused U.S. stocks to plummet, so Yellen clarified her rate hike comments made earlier late Tuesday, saying she did not expect the Biden administration’s push for a stimulus program to inevitably lead to the need for a modest rate hike by the Federal Reserve.
Yellen clarified that because the Fed has independence and the right to make autonomous decisions on interest rate policy, she showed herself to be a firm believer in the independence of the Fed; Yellen stressed that interest rates are one of the tools of the Fed to deal with an overheated economy, but she does not expect inflation to be a problem because the Fed has measures to solve inflation problems.
Dallas Federal Reserve Bank President Kaplan (Robert Kaplan) on Tuesday also expected that the U.S. inflation rate will rise sharply in the next few months, before the end of the year is back to 2.25%; U.S. business people believe that the supply chain disruptions and other factors, may lead to rising inflation, may need a longer time to solve the inflation problem.
Kaplan said that is still watching and studying the changes in inflation in the United States in the coming years, there is no clear view for the time being.
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