Politics

Janet Yellen sees ‘several more months of rapid inflation’ before easing—worries about housing impact

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Treasury Secretary Janet Yellen cautioned Thursday that prices could continue to rise for several more months, though she expects the recent inflation run to ease over time.

In a CNBC interview, the Cabinet official added that she worries about the problems inflation could pose for lower-income families looking to buy homes at a time when real estate values are surging. “We will have several more months of rapid inflation,” Yellen told Sarah Eisen during a “Closing Bell” interview. “So, I’m not saying that this is a one-month phenomenon. But I think over the medium term, we’ll see inflation decline back toward normal levels. But, of course, we have to keep a careful eye on it.”

The consumer price index, which measures costs for a wide variety of items, increased by 5.4% in June, the fastest pace in nearly 13 years. Excluding food and energy, the gauge rose 4.5%, the fastest acceleration in nearly 30 years. Prices that goods and services producers receive for their products jumped 7.3%, a record for data going back to 2010. Also, housing prices in the nation’s largest cities climbed nearly 15% in the most recent measurements from S&P CoreLogic Case-Shiller.

All of that has added up to concern that inflationary pressures could stall the aggressive U.S. economic recovery, with the housing escalation raising fears of a bubble. “So I don’t think we’re seeing the same kinds of danger in this that we saw in the runup to the financial crisis in 2008,” Yellen said. “It’s a very different phenomenon. But I do worry about affordability and the pressures that higher housing prices will create for families that are first-time homebuyers or have less income.”

ARTICLE: PAUL MURDOCH

MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: CNBC

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Paul Murdoch

Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

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