US Treasury Secretary Yellen: Raising Interest Rates is Good for the United States
The U.S. Treasury Secretary Yellen said that the $4 trillion spending plan proposed by U.S. President Biden will benefit the United States, even if it will cause interest rates to rise.
In an interview with reporters, the former Fed chairman said that the president’s package plan will total US$400 billion annually. She believes that this level of expenditure is not enough to cause excessive inflation.
She said: “For ten years, we have been fighting against too low inflation and too low interest rates.” She added,
She believes that the current price increase is driven by “temporary abnormalities” caused by the new coronavirus pandemic.
. She believes that this level of expenditure is not enough to cause excessive inflation. The price “surge” caused by the plan will subside next year.
Yellen said: “For ten years, we have been fighting against low inflation and interest rates. If the package can help alleviate the problem, then it is not a bad thing, but a good thing.”
It is reported that the U.S. CPI in April rose 4.2% year-on-year, the highest level since September 2008. The data for May will be released on Thursday. In addition, the latest data show that the number of employed persons and workers’ wages in the United States increased in May, and the unemployment rate fell to 5.8%.
The Fed has promised that it will only begin to reduce its $120 billion monthly asset purchase plan after it has made “substantial progress” in inflation and employment.
Yellen said that he would not abandon the next package because it is not an investment to stimulate the economy, but to address the long-term needs of the US economy.