US Treasury Secretary Calls Higher Interest Rates Good

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US Treasury Secretary Janet Yellen is not concerned about higher inflation and interest rates. According to her, they have been too low in recent years.

 

President Joe Biden’s huge economic support package could contribute to higher inflation and interest rates, which is good for the United States.

“If we get into a slightly higher interest rate environment, that would be a plus for society and also for the Federal Reserve,” Yellen said in an interview with Bloomberg news agency after returning from the G7 summit in London. “We are fighting inflation that was too low and interest rates that were too low for a decade.” According to her, they should return to a more normal level.

Yellen doesn’t think Biden’s $4 trillion bailout package will lead to inflation soaring. A possible “spurt” in prices due to that package will, according to her, sink next year. Fed policymakers have also indicated that higher inflation is likely to be temporary. Yellen is the former chairman of the US central bank.

Recently, financial markets have been unsettled by rising inflation as economies reopen from the coronavirus pandemic. Inflation is also being driven by supply chain problems, including computer chips and rising commodity prices. As a result, the Fed may be able to taper its support programs more quickly and raise interest rates.

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