Treasury Secretary Janet Yellen at the COP26 climate conference in Glasgow, Scotland, earlier this month. Photo: Christopher Furlong/Getty Images
Treasury Secretary Janet Yellen said in a CBS interview broadcast Sunday that COVID-19 "has been calling the shots for the economy and for inflation" in the U.S. and future stability depends on the outcome of the pandemic.
Why it matters: The rate of price growth has remained consistently strong in recent months, per Axios' Kate Marino. The Consumer Price Index released last Wednesday showed inflation has reached a 30-year-high, with overall prices rising 6.2% from one year ago.
What she's saying: "[I]f we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do," Yellen told CBS' "Face the Nation."
- "I think it's important to realize that the cause of this inflation is the pandemic," she added.
Of note: Yellen acknowledged "big increases in prices" for fuel and food, but told CBS' Margaret Brennan she expected that to change "when the economy recovers enough from COVID."
- When that happens, "people go back to eating out, traveling more, spending more on services, and the demand for products, for goods begins to go back to normal," she said.
- "And, also, labor supply has been impacted by the pandemic. Labor force participation is down. It hasn't recovered," Yellen added.
The bottom line: Yellen expects prices to go back to normal in the second half of next year "if we're successful with the pandemic."