(Bloomberg) – Treasury Secretary Janet Yellen has rejected the notion that the Federal Reserve and its allies should raise their inflation targets at a time when the cost of living is rising.
“I do not see immediate change as the cause of the change,” Yellen told reporters in Germany’s Forest Service on Thursday, referring to the possibility of globalization pushing up prices. “The challenge is to meet the established inflation targets.”
U.S. consumer prices have risen more than 8% year-on-year in the past two months, and some economists have questioned whether the Fed will be able to lower its target profit of 2% for the year. This has fueled speculation that the Fed may need to increase its target.
Yellen Ban is attending a meeting of finance ministers and central bank governors of the Group of Seven advanced economies. He told a rally on Thursday that a key message within the group was that it would “stand by Ukraine”, with new promises of support.
The US Senate on Thursday approved a িয়ন 40 billion aid package for Ukraine. From that amount, Yellen said Kyiv would receive $ 7.5 billion in “pure economic aid in the form of grants.”
The other G-7 countries are expected to collectively kick around the same amount for a support plan that will be announced at the end of the forest meeting on Friday.
German Finance Minister Christian Lindner said on Thursday that his country would contribute 1 billion euros (1 1.1 billion).
“As we walked around the table I can tell you there was a general expression of support,” Yellen said of the rally of finance ministers. “We are all committed to doing what is needed.”
The Treasury chief said officials had also discussed ways to limit Russia’s oil revenues and reduce the impact on energy prices. The United States has already banned oil imports from Russia, and European Union countries are aiming to do the same gradually next year.
“The aim is to keep some Russian oil flowing in the market so that global prices can be maintained so that we do not have an unwanted negative impact,” Yellen said.
Other options are being considered, he said, including the formation of a “buyer’s cartel” that would limit oil prices. Allies are willing to pay for Russian oil.
“A lot of people, including me, find it interesting from a general economic point of view, but it’s not really challenging to implement it and work through all these problems,” he said.
For the U.S. economy, Yellen says the Fed faces a tough challenge in trying to reduce inflation without provoking a recession. He reiterated his view that “it requires both skill and luck.”
“It could be a soft landing,” he said. “But it is a very difficult economic situation. It is not the supply that we have pushed, the war that has continued, the sanctions that have been imposed. We could face further inflationary risks in the world economy. ”
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