Yellen: Most People ‘Know that Prices Are Not Likely to Fall’ After ‘Maybe 20%’ Jump from Pre-COVID Levels

During an interview with ABC News on Thursday, Treasury Secretary Janet Yellen said that “most Americans know that prices are not likely to fall.” And that while there have been improvements in consumer sentiment, “apartment rents, food are maybe 20% higher than they were before the pandemic. And I think that’s something that influences sentiment.”

ABC News Washington Correspondent Elizabeth Schulze asked, “How do you convince Americans and voters that those prices might not go back to where they were before the pandemic?”

Yellen answered, “Well, I think most Americans know that prices are not likely to fall. It’s not the Fed’s objective to try to push the level of prices back to where they were, but to stop them from rising so wage gains exceed price gains.”

Schulze then asked, “Despite the strong economic data that you were talking about, we know that President Biden’s handling of the economy is at a record low. What do you say to Americans who see this data, but say they are just not feeling that economic strength?”

Yellen responded, “Well, first, I’d like to say that recent surveys suggest that picture is changing. We’ve seen a massive increase, improvement in consumer sentiment in recent surveys. The pandemic had a huge impact on so many households, apartment rents, food are maybe 20% higher than they were before the pandemic. And I think that’s something that influences sentiment. But what’s happening, for more than a year now — and I expect this to continue — is wages are rising more rapidly than prices.”

Follow Ian Hanchett on Twitter @IanHanchett