© Bloomberg. Janet Yellen, US Treasury secretary, during a news conference on the sidelines of the G7 meeting of finance ministers and central bank governors, in Koenigswinter, Germany, on Wednesday, May 18, 2022. Yellen said that it’s understandable the dollar has appreciated amid rising US interest rates, and that these gains have posed a concern for some other countries.
(Bloomberg) — Treasury Secretary Janet Yellen rejected any idea that the Federal Reserve and its counterparts should boost their inflation targets given the importance of stable price expectations at a time when living costs are surging.
“I don’t immediately see that as a reason to change,” the inflation target, Yellen told reporters Thursday in Bonn, Germany, referring to the potential for deglobalization to boost the trend rate of price increases. “The challenge is to meet the inflation targets that have been established.”
US consumer prices have surged by more than an 8% annual rate the past two months, and some economists have questioned whether the Fed will be able to bring gains down to the 2% target for years. That’s in turn spurred speculation the Fed may need to boost its target.
Yellen is in Bonn attending meetings of finance ministers and central bank governors from Group of Seven advanced economies. She said at Thursday’s gathering, a key message among the group was that it will “stand by” Ukraine, with a fresh commitment of support coming.
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Yellen Rejects Idea of Fed Raising 2% Inflation Target