Yellen says COVID-19 pandemic is ‘responsible’ for inflation increases

Treasury Secretary Janet Yellen in a new interview said the COVID-19 pandemic is the cause for the record inflation increase the U.S. is seeing nationwide.

Asked by host Margaret Brennan on Sunday in a pre-taped interview on CBS’s “Face the Nation” if she is confident prices for the average American will be back at normal levels by next November, Yellen said it “really depends on the pandemic.”

“The pandemic has been calling the shots for the economy and for inflation. And if we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do. I think it’s- it’s- it’s important to realize that the cause of this inflation is the pandemic,” Yellen told Brennan in the interview that aired on Sunday.

The Labor Department released new data on Wednesday illustrating that annual inflation has reached a 30-year high after increasing 6.2 percent in the 12-month period ending in October.

The announcement set off alarm bells throughout the U.S., as Americans grapple with rising prices ahead of the busy holiday season.

Yellen said the pandemic triggered the massive inflation because it “all but shut down our economy,” and “led to a dramatic increase in demand for – for products.”

“The pandemic is really responsible, in its impact for the inflation that we’re seeing,” she emphasized.

“Households were unable to spend on services — going out to eat and traveling. They shifted as they stayed at home, worked more from home. They shifted their spending on to goods that led to a surge in the demand for products. And although the supply of products has increased in the United States and globally, not as much as demand,” she added.

Asked by Brennan when she predicts prices will revert back to normal levels, Yellen said that if the U.S. is “successful with the pandemic” that could occur “sometime in the second half of next year.”