Yellen says U.S. inflation coming down but core measures remain elevated

[February 24, 2023]  By David Lawder
 
BENGALURU (Reuters) - U.S. Treasury Secretary Janet Yellen said on Friday that U.S. inflation was coming down but there was still more work to do to bring it in line with the Federal Reserve's 2% annual target.  

U.S. Treasury Secretary Janet Yellen speaks during a news conference as G20 finance leaders gathered on the outskirts of Bengaluru, India, February 23, 2023. REUTERS/Samuel Rajkumar

Yellen also told reporters on the sidelines of a G20 finance ministers and central bank governors' meeting near the Indian tech hub of Bengaluru that she still believes that a "soft landing" without a recession is possible due to a strong labor market and strong U.S. balance sheets.

"Inflation is coming down if you measure it on a 12 month basis, but still core inflation, which I think will fall further, remains higher than is consistent with 2%," she said, referring to the Fed's target rate.

Echoing comments she made on Thursday that the U.S. and global outlooks were improving despite ongoing pressures from the war in Ukraine, Yellen said the U.S. economy is "fundamentally in good shape."

"Employment, you know, continues to increase. Households are in good shape. You know, we don't have balance sheet problems of the type that we had prior to the (2008-2009) global financial crisis," Yellen said referring to high debt levels and crashing home prices of that era.

(Reporting by David Lawder. Editing by Jane Merriman)

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