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Yellen says she expects inflation will return to normal levels 'over the next couple of years'

In an interview at the G-20 summit, the treasury secretary said inflation was "poised to come down" but declined to offer a more detailed forecast.
Treasury Secretary Janet Yellen at the G20 Summit in Indonesia on Nov. 13, 2022.
Treasury Secretary Janet Yellen at the G-20 Summit in Indonesia on Sunday. Bay Ismoyo / AFP - Getty Images

BALI, Indonesia — Treasury Secretary Janet Yellen said she expects inflation will recede to normal levels over the next two years, down from near-four-decade highs.

“I do expect inflation to come down,” Yellen said in an interview at the summit of the Group of 20 leading rich and developing nations here when she was asked whether the worst of the price increases were over. “I think we see some good indications that inflation is poised to come down.”

Pressed about on a timeline for inflation to cool, Yellen declined to provide a monthly forecast basis but said, “Over the next couple of years, I definitely think that inflation will come back down to levels toward normal levels we’re accustomed to.”

She added that while the Labor Department’s Consumer Price Index report for October was “solid,” the reading wasn’t enough to make a judgment about the coming months.

Consumer price increases eased to 7.7% last month, in what could be an early sign that inflation is subsiding. The data compared with a reading of 8.2% on an annual basis in September. On a monthly basis, inflation rose by 0.4%, the same as in September.

President Joe Biden at the time lauded the report as “progress” in the effort to wrangle price growth.

“It will take time to get inflation back to normal levels — and we could see setbacks along the way — but we will keep at it and help families with the cost of living,” he said.

The Federal Reserve announced this month that it had increased its key interest rate by another 0.75% in its effort to tame inflation to closer to its 2% annual target.