BlogJanet Yellen Is Scared Of Inflation it's unacceptably high

Janet Yellen Is Scared Of Inflation it’s unacceptably high

Janet Yellen is the current treasury secretary and the former chairwoman of the Federal Reserve System. She recently came out and said inflation is way too high in fact it’s unacceptably high. Now we just got the data from June of 2022 and inflation has come in at 9.1 percent. 

It’s 40 years high which we haven’t seen since the 1980s. Now not only does Janet Yellen believe that inflation is at an unacceptably high or dangerous level. But she also believes that the Federal Reserve and the treasury are doing everything they can to help bring inflation down. 

In a recent speech, Yellen had many interesting comments she says Inflation is unacceptably high and that’s something that’s evident from Wednesday’s report. I believe it’s appropriate that it’s our top Pro it should be the top priority to bring inflation down. The labor market is currently very strong. We’ve witnessed and historic recovery and employment. We’ve now regained all of the private sector jobs that were lost the labor market is tight.

The labor market is in good shape we are first and foremost supportive of the fed’s efforts which they see deemed to be necessary to get inflation under control. Beyond that, we’re taking our own steps that we believe will be supportive in the short term to get inflation down. Particularly what we’re doing on Energy prices in 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. Now there are three things that you Ellen highlight here that I think are interesting. The first is that inflation is too damn High. The second is that unemployment is near a historic low and the label Market is tight. Third is that the United States is trying whether successfully or not to use its strategic reserves to help get oil prices down.

Now at the end of the day, the economy is a complex machine one organization like the Federal Reserve or another like the treasury. Even our elected official’s none of them have a magic wand. All of the inputs go into prices exploding upwards. Supply shocks, demand shocks, loose monetary policy, and geopolitical conflict are all of these different aspects of the global economy that are coming to a head now. 9.1 percent inflation is unacceptably high. The average American family cannot continue to withstand this acceleration in prices. 

Whether we believe that the Federal Reserve and Treasury are doing everything they possibly can or not. I don’t necessarily Envy their position it’s a situation. If they continue to raise interest rates aggressively and conduct quantitative tightening. It is pushing the US economy into a recession. If they don’t act inflation will continue out of control.

High inflation or a recession pick your poison and if we’re really unlucky then we will get both in a bout of stagflation. Listening to Janet Yellen someone who’s been involved in monetary policy and macroeconomic Theory across the United States government is interesting. Because it gives us an insight into how people in her position are thinking both about the economy and what various organizations can do in response.

I don’t know what the answers are but I know that 9.1 percent inflation is bad news. I also know that if they continue to aggressively hike rates and conduct quantitative tightening. We will go into a recession. Stay safe out there my friends and make sure you’re paying attention.

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