Yellen: Inflation falling 'meaningfully'

US Treasury Secretary Janet Yellen said that inflation in the country has fallen ‘meaningfully’ and that she sees no reason why the US Federal Reserve (Fed) should not decrease to its target. US Treasury Secretary Janet Yellen made assessments on the economic agenda at the CEO Council Summit organized by The Wall Street Journal. Stating that inflation in the US has fallen “absolutely meaningfully”, Yellen stated that on the current course she sees no reason why inflation should not gradually fall to levels compatible with the Fed’s 2% target. Pointing out that the supply chain problems and mismatches in the labor market arising from the Covid-19 outbreak appear to be improving, Yellen conveyed that inflation is falling while the labor market remains quite strong. Stating that the labor market is cooling, Yellen noted that wage increases are continuing at a healthy pace. US economy on path to a “soft landing” Yellen stated that she does not believe that the final stage of reducing inflation will be particularly difficult. Emphasizing that inflation expectations are important in this process, Yellen stated that the latest data showed that expectations have started to decline and that she thinks inflation expectations are well under control. Yellen stated that the increasing trend in real interest rates has caused monetary policy to tighten in a sense, and that this is one of the factors that may affect the Fed's interest rate decision. Noting that the US economy is on the path to a "soft landing," Yellen said, "In my opinion, a soft landing means that the economy continues to grow, the labor market remains strong, and inflation falls. I believe we are on that path as well." According to data announced by the US Department of Labor, the Consumer Price Index (CPI) in the country increased by 0.1 percent in November, contrary to market expectations that it would show no change on a monthly basis, and increased by 3.1 percent on an annual basis, in line with expectations.