“It’s having a substantial adverse impact on many vulnerable households And we are laser-focused on addressing inflation,” Yellen said, repeating the Biden administration’s initiatives to hold down gasoline prices through large releases of crude oil from the Strategic Petroleum Reserve and efforts to unblock congested U.S. ports.
Yellen said that various factors were fueling inflation, including spikes in energy prices due to Russia’s invasion of Ukraine and continued pandemic-driven supply chain problems, and other countries were also experiencing high inflation.
Data on Thursday showed that the U.S. labor market remained tight, as producer price inflation has started to decelerate, rising 0.5% in April compared to a 1.6% surge in March, the Labor Department said.
“It does show that there are factors beyond spending in the United States that are critical to inflation,” she said.
Yellen told a U.S. House of Representatives Financial Services Committee hearing on Thursday that “all of those things suggest that the Fed has a path to bring down inflation without causing a recession, and I know it will be their objective to try to accomplish that.”
She deflected several attempts from Republican lawmakers to try to coax her to blame high inflation on the Biden administration’s $1.9 trillion COVID-19 relief spending package last year.