US Treasury secretary Janet Yellen has urged Congress to pass new measures to help ease ongoing price surges, as pressure mounts on the Biden administration to do more to contain the highest inflation in four decades.
Lawmakers on the Senate Finance Committee grilled Yellen on Tuesday about the state of the economy, which has rebounded rapidly from the depths of the Covid-19-induced crash but is now beset by soaring costs for almost all goods and services.
“Congress can do a lot to mitigate some of the most important and burdensome costs that households face,” Yellen said, noting specific proposals to reduce prescription drug prices, improve access to affordable housing and bolster investments in renewable energy.
“In the course of doing that, we’ll expand the supply side of our economy,” she said. Investments in education and training, childcare as well as eldercare would lead to a larger labour force, she said, helping to bring down inflation and leading to “strong, sustainable [and] stable growth”.
Yellen’s testimony comes just days after she conceded she was “wrong” last year about the threat posed by rising inflation, having previously ascribed price pressures to “transitory” forces such as supply-chain bottlenecks and other Covid-related disruptions, as did many private forecasters and the Federal Reserve.
She also became ensnared in controversy after excerpts from a new biography alleged that she had initially wanted to trim last year’s $1.9tn stimulus package by a third for fear that it would push up prices. Yellen has since rebutted those claims.
The Treasury secretary on Tuesday defended the actions taken by the Biden administration, but acknowledged that inflation is now running at an “unacceptable” level and that “an appropriate budgetary stance is needed to complement monetary policy actions by the Federal Reserve”.
The US central bank has since March raised interest rates by…
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