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Yellen urges Congress to do more to fight inflation

US Treasury Secretary Janet Yellen has urged Congress to pass new measures to help cushion the ongoing price hike, as pressure mounts on the Biden administration to do more to rein in high inflation. the most in four decades.

Lawmakers on the Senate Finance Committee Baked Yellen on Tuesday on the state of the economy, which has recovered quickly from the depths of the Covid-19 crash but is now beset by rising costs for most goods and services. .

“Congress can do a lot to reduce some of the most important and burdensome costs faced by households,” Yellen said, noting specific proposals to reduce prescription drug prices, improve access to affordable housing and increased investment in renewable energy.

“In the process of doing that, we will expand the supply of our economy,” she said. Investments in education and training, childcare and aged care, she said, would lead to a larger workforce, lower inflation and lead to “strong, sustainable [and] steady growth”.

Yellen’s testimony came just a few days later She admitted that she was “wrong” last year about the threat posed by rising inflationhas previously attributed price pressure to “transient” forces such as supply chain bottlenecks and other Covid-related disruptions, as have many private forecasters and the Federal Reserve.

She was also involved in controversy after an excerpt from a new bio alleges that she originally wanted to cut last year’s $1.9 billion stimulus package a third for fear that it will push the price up. Yellen has since denied those claims.

The Treasury Secretary on Tuesday defended the Biden administration’s actions, but acknowledged that inflation is now “unacceptable” and that “an appropriate fiscal stance is needed to supplement for the Federal Reserve’s monetary policy actions.

The US central bank since March has raised interest rates by 0.75 percentage points from near-zero levels it has been in for two years and is poised to deliver at least two more half-point rate hikes. at upcoming policy meetings scheduled to take place in the near future. during the week and at the end of July. Market participants expect the Fed to eventually raise the federal funds rate to around 2.8% later this year.

When asked by Steve Daines, a Republican senator from Montana about the Biden administration’s role in causing high inflation, Yellen refused. “We are seeing high inflation in most of the developed world, and they have very different fiscal policies,” she said. “Therefore, it cannot be the case that much of the inflation we are experiencing reflects the effects of [stimulus package]. ”

“When designing a policy, a variety of risks need to be taken into account,” she added. Inflation is one of them, of course, but the big risk is that Americans will be hit by a deep and prolonged recession.”

Yellen said on Tuesday any new legislation must be paid for or structured in a way that results in a smaller deficit.

“Requiring high-income taxpayers and corporations to pay their fair share is the right way to finance those investments,” she said, adding that addressing the estimated disparity about $600 billion annually in taxes owed but not paid, is “absolutely important in ensuring fiscal accountability.”

“It will generate substantial revenue in an efficient and fair manner,” she said. “It will enable deficit reduction and help alleviate price pressures by providing some of the funding we need for the urgent fiscal priorities we’ve discussed.”

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