Yellen: People ‘Are Beginning to Understand that Inflation’s Coming Down’ But We Won’t Hit Inflation Target Until 2024

On Wednesday’s broadcast of CNBC’s “Squawk on the Street,” Treasury Secretary Janet Yellen stated that “Consumers are beginning to understand that inflation’s coming down.” But “the level of prices in some cases is higher than it was before the pandemic. And people notice that,” and she believes that inflation will likely be under 3% by the end of 2024.

Yellen said, “I thought it was a hopeful sign that, in the recent preliminary Michigan survey, you do see an uptick in consumer confidence. Consumers are beginning to understand that inflation’s coming down. And although, wage growth has moderated some, it remains healthy and inflation’s come down and now, real earnings are going up. And so, gradually, over time, I think people will feel better about the economy. Now, the level of prices in some cases is higher than it was before the pandemic. And people notice that, they notice their bills — certain bills are higher. Rent would be a very good example, apartment rentals, for example.”

She added that “some important prices — gas prices are now way down, a number of states where it’s — a gallon is running at under $3 a gallon, which is great news for consumers. We saw egg prices utterly skyrocket, mainly because of the avian flu. They’ve come down back toward pre-pandemic levels. But still [elevated].”

Co-host Sara Eisen then asked, “So, when do you think the Fed will achieve its 2% inflation target? When does that happen?”

Yellen responded, “Well, my expectation is that inflation will continue to come down. And I would frankly expect — I don’t want to do a precise forecast here for you, but I think when we come to the end of 2024, 2 is certainly likely to be the first numeral. And I think we’re getting a lot closer.”

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