Treasury Secretary Janet Yellen described the U.S. inflation rate as “unacceptably high” on Thursday, adding that it is the Biden administration’s “top economic priority to bring it down.”
Consumer price data released by the Labor Department on Wednesday showed inflation hit new heights last month.
The consumer price index (CPI), a benchmark to measure inflation, rose 1.3 percent in June and 9.1 percent annually, according to the report. Economists had expected less of an increase, but annual inflation hit its highest rate since 1981.
Yellen in particular pointed to rising prices in areas like energy, which economists say is traditionally volatile and has seen a spike in recent months amid Russia’s ongoing war with Ukraine.
“That was reflected in yesterday’s CPI data, which showed almost half of the increase coming from higher energy prices,” Yellen said.
“Inflation in the United States remains unacceptably high and it’s our Administration’s top economic priority to bring it down. We should also be mindful of the spillover effects of Putin’s war — the effect it’s having in countries that were already facing heightened vulnerabilities,” Yellen added.
Yellen was also asked about the Federal Reserve’s efforts to combat the upward swing in prices by significantly hiking interest rates, the central bank’s main tool to get inflation under control, amid rising concerns the actions could lead to a potential recession later on down the line.
“We’re first and foremost supportive of the Fed’s efforts — what they see, deemed to be necessary to get inflation under control,” Yellen said, while noting that the administration is taking its “own steps” to try to ease inflation in the short term.
“Particularly what we’re doing on energy prices, the Strategic Petroleum Reserve. Also, the work that we’re doing to institute a price cap on Russian oil to avoid potential future spikes in oil prices,” she said.
“We’re very supportive of deficit reduction and very much hope that Congress will pass a reconciliation bill that would help lower some of the important costs faced by consumers, particularly prescription drugs,” Yellen said.