BALI, Indonesia — U.S. Treasury Secretary Janet Yellen has warned that inflation in the U.S. is “unacceptably high” and said bringing down rising prices will be Washington’s “top priority.”
Data released Wednesday showed U.S. consumer inflation rose to 9.1%, the highest level since 1981.
“We’re first and foremost supportive of the Fed’s efforts; what they deem to be necessary to get inflation under control,” she said at a news conference in Bali ahead of the Group of 20 finance ministers’ meeting.
“Beyond that, we are taking our own steps which we believe will be supportive in the short term to get inflation down — particularly what we’re doing on energy prices and the Strategic Petroleum Reserve.”
“And also the work that we’re doing to institute the price cap on Russian oil and to avoid potential future spikes in oil prices,” she added.
Almost half of the increase in prices in the latest inflation numbers came from high energy costs, Yellen added.
Asked whether bringing down inflation was more important than the risk of a recession caused by higher interest rates and slowing growth, Yellen said she believed that it was appropriate the top priority should be to bring down inflation as the labor market is “currently very strong.”
Yellen said, however, that rising interest rates could have a spillover effect into other economies.
A strong U.S. dollar would make other currencies comparatively weaker, but could also make their exports cheaper and more attractive.
“On the one hand, it can strengthen their ability to export which is good for their growth. On the other hand, to the extent that countries have dollar-denominated debt, it can make those debt problems — which already are very severe — more difficult,” she said.