“Policymaking is about identifying and addressing risks, and the most significant risk we face is a workforce that’s scarred by a long period of unemployment,” Yellen said on ABC’s “This Week.”
“That’s a temporary movement in prices,” she said. “To get a sustained high inflation like we had in the 1970’s, I absolutely don’t expect that. We’ve had a very well anchored inflation expectations, and a Federal Reserve that’s learned about how to manage inflation. So, I don’t think it’s a significant risk and if it materializes, we’ll certainly monitor for it, but we have tools to address it,” she added.
When pushed by ABC’s George Stephanopoulos on the federal debt, Yellen said she’s changed her views “somewhat” about fiscal sustainability in part because of the global trend toward very low interest rates.
“When I think about the burden of debt, I think about it mainly in terms of the interest payments that the government needs to pay on those on that debt. And in spite of the fact that the debt is increased substantially, on interest payments relative to this year, to the size of the economy have remained quite low, no higher than they were back in 2007,” she said.
“But, of course, we have to make sure that the economy’s budget is on a sustainable path and this is something that we can afford. In the longer run, we need to get deficits under control to make sure that our fiscal situation is sustainable.”
Read More:Janet Yellen: Prices will rise because of Joe Biden’s stimulus, but that won’t last
2021-03-14 16:30:00
