Treasury Secretary Janet Yellen said that “unacceptably high” prices are likely to stick with consumers through 2022, but that strong personal finances will stave off a recession.
US inflation accelerated to 8.6% in May, a fresh 40-year high that signals price pressures are becoming entrenched in the economy. Those figures dashed any hope that inflation was starting to ebb, prompting the Federal Reserve to unleash its biggest interest-rate increase since 1994.
The reasons behind stubborn inflation are “global, not local,” according to Yellen, who pointed to disruption in energy supply from the war in Ukraine and goods coming in from China where Covid-related lockdowns continue.
“These factors are unlikely to diminish immediately,” she said. “There are so many uncertainties related to global developments.”
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