Finance Minister Janet Yellen claimed on Sunday that the end of inflation will depend on the pandemic and whether there is a “successful” response to COVID-19 from the Biden administration.
In a pre-recording interview with CBS’s “Face the Nation” aired on Sunday, Yellen was asked if she is sure the inflation rate will return to normal levels by November next year, prompting her to say that “the pandemic has called shots for the economy and for inflation. “
“If we want to bring down inflation, I think continuing to make progress towards the pandemic is the most important thing we can do,”[ads1]; Yellen told host Margaret Brennan. “I think it is – it is important to realize that the cause of this inflation is the pandemic.”
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Brennan then listed many groceries facing sky-high prices, including milk, eggs and coffee, as well as gas, before asking, “When will it get better? When will these peaks subside?”
“When the economy recovers enough from COVID that the demand patterns – people return to eating out, travel more, spend more on services, and the demand for goods products begins to return to normal,” said Yellen. “The labor supply has been affected by the pandemic. The labor force participation is down. It has not recovered.”
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She went on to repeat that if they are “successful” with the pandemic response, she expects prices to return to “normal”.
Later in the interview, Brennan said that China’s leaders had repeatedly asked for Trump’s tariffs on Chinese products to be raised and asked Yellen if the prices of groceries or products would go down if they followed suit.
“It would make a difference,” Yellen said. “Tariffs tend to raise domestic prices. We put those tariffs in place. President Trump and his administration did so in retaliation for unfair trade practices.”
Asked if tariffs should remain in place, Yellen said U.S. Trade Representative Katherine Tai reconsidered the Phase 1 trade agreement, saying it was “definitely under consideration.”
White Houses National Economic Director Brian Deese appeared on CNN’s State of the Union earlier Sunday morning, announcing Democrats’ $ 1.75 trillion in social spending and a climate package as the solution to rising inflation.
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“By offering affordable child care, affordable elderly care, we will help get these people back into the workforce, which will reduce price pressures while reducing the practical costs that Americans face,” Deese said. “That’s what we’re going to do, and that’s why delivering right now to the American people is the right thing to do.”
“We are confident that this bill, as it moves through the process, will be paid in full,” he added. “And not only that, it’s actually going to reduce deficits in the long run.”
Fox News’ Jessica Chasmar contributed to this report.