By David Lawder and Andrea Shalal
WASHINGTON (Multibagger) - Treasury Secretary Janet Yellen stated on Tuesday that rent and housing costs are contributing to higher U.S. inflation levels but reassured that consumer price pressures are expected to decrease over time. Yellen highlighted that factors such as supply chain issues and labor market tightness have eased, which will help drive down inflation.
During a hearing with the U.S. House of Representatives Financial Services Committee, Yellen mentioned, "Rents and housing costs continue to keep inflation higher than desired, but I believe that it will gradually come down over time."
Lael Brainard, chair of the White House National Economic Council, echoed Yellen's sentiments and applauded the progress made in reducing inflation. She noted that recent data indicated an inflation rate of 2.6%, marking significant improvement towards the Federal Reserve's 2% target.
Brainard also highlighted positive trends such as decreasing food prices and stable gasoline prices, with hopes of further alleviating the cost of living for Americans. President Joe Biden's administration remains committed to addressing housing affordability, rent stability, and introducing tax credits for first-time homeowners.
As the Fed awaits consumer price data for June, analysts anticipate another modest reading following a stagnant consumer price index in May. The focus remains on sustaining the downward trend in inflation while supporting working families to cope with living expenses.
Analysis:
Inflation in the U.S. has been driven by factors like rent and housing costs, but government officials are optimistic about a gradual decrease in consumer price pressures. The Biden administration's efforts to tackle inflation include measures to make housing more affordable and stabilize rents. These initiatives aim to provide relief to Americans facing financial strain and contribute to overall economic stability.