US inflation will be much lower by the end of 2023 – Yellen

US Treasury Secretary Janet Yellen predicted on Sunday a substantial reduction in US inflation in 2023, barring an unexpected shock.

“I think by the end of next year you’ll see much lower inflation if there’s not…an unforeseen shock,” she told CBS’ 60 Minutes in an interview published on Sunday.

Asked about the likelihood of a recession, the former Federal Reserve Chairman said: “There is a risk of a recession. But … it is certainly not, in my opinion, something necessary to bring down the ‘inflation.”

Yellen’s comment came days before the Fed slowed the aggressive pace of interest rate hikes it has continued this year. Fed Chairman Jerome Powell telegraphed a smaller, half-percentage-point hike in the key rate, to a range of 4.25% to 4.5%, after four 75-point hikes. basis this year.

Yellen told CBS that economic growth was slowing significantly, inflation was falling, and she remained hopeful the labor market would remain healthy.

She said she hoped the spike in inflation seen this year would be short-lived and said the US government had learned “a lot of lessons” about the need to reduce inflation after the high prices seen in the years 1970.

Shipping costs had gone down and long delivery times had eased, while gas prices at the pump were “falling”.

“I think we will see a substantial reduction in inflation in the coming year,” she said.