Treasury Secretary Janet Yellen on Thursday defended the Biden administration’s economic achievements in the president’s first year in office and said she hopes to see inflation approach 2% by the end of it. of 2022.

She pointed to robust gains in the US labor market over the past 12 months, including the addition of more than 6 million jobs and an unemployment rate below 4%.

“A year ago, if you go back to the challenges we were facing, and the Federal Reserve, unemployment was extremely high. it took almost ten years to get back to full employment,” Yellen said.

“I think that having unemployment drop the most in one year in American history should be considered a remarkable achievement,” the Treasury Secretary told CNBC’s “Closing Bell.”

Jobs remains a strong point for the White House and the Treasury Secretary. Rebounding from the Covid-19 pandemic, U.S. employers created a record 6.4 million jobs in 2021 while the unemployment rate is below 4%, according to the latest Labor Department data.

As President Joe Biden’s choice to lead the department, Yellen has spent much of 2021 coordinating White House economic policy and the disbursement of emergency Covid-19 funds to American consumers and businesses.

Yellen acknowledged that the economic landscape isn’t perfect and painful inflation is causing households that haven’t seen commensurate wage gains.

“I expect inflation for much of the year – 12-month changes – to stay above 2%,” she said. “But if we are successful in controlling the pandemic, I expect inflation to decline over the course of the year and hopefully return to normal levels by the end of the year, around 2%.”

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She and other administration advisers have sought in recent months to allay public concerns about a sharp rise in prices thanks to widespread supply chain disruptions and fierce demand for goods. The Labor Department said earlier in January that prices rose 7% in December on an annual basis, the fastest rate of inflation since 1982.

Yellen echoed Biden’s comments on Wednesday, when the president said he thought it was time for the Federal Reserve and Chairman Jerome Powell to “recalibrate” monetary policy to bring prices down. The Fed is responsible for keeping inflation around 2% and has the power to raise interest rates to fight prices across the economy.

Powell and his fellow Fed officials have been warning for months that the world’s most powerful central bank will soon raise borrowing costs. While the timing of the first hike is unclear, Wall Street is pricing in a 90% chance of a quarter-point rate hike in March.

Yellen advised the president on his appointments to the Fed board, including a second term for Powell, whom she has repeatedly praised for helping the central bank support the economy during the pandemic.

More recently, Yellen championed the Biden administration’s attempt to pass massive climate change, child care and labor legislation known as the Build Back Better plan. Republicans are united in their opposition to the bill, which they say will make the current rash of inflation even worse.

But resistance within Democratic ranks is ultimately what halted progress on the Build Back Better legislation. Centrist Democrats like the senses. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have repeatedly expressed concerns about the size and scope of the bill and how it could affect prices.

Yellen and the rest of the Biden administration challenged those concerns and tried to show that the infrastructure legislation already enacted and the Build Back Better plan will help address supply chain issues and runaway inflation.


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