Inflation Risks and Monetary Policies in the US: An Assessment

Economist Janet Yellen, former U.S. Treasury Secretary and ex-Federal Reserve (Fed) Chair, recently highlighted concerns regarding inflation in the United States at a panel organized by Expert XP in São Paulo. In her assessment, while inflation has decreased following pandemic-related shocks, it remains a significant issue. Yellen suggested that the Fed may keep interest rates high or even raise them if price pressures persist or intensify, reflecting a cautious strategy but also an acknowledgment of macroeconomic stability risks and the balance between economic growth and inflation control. Moreover, she pointed to the impact of trade tariffs imposed by the previous administration under President Donald Trump, which had a significant effect on U.S. inflation. However, Yellen noted that these effects may take years to dissipate. The situation in the Middle East was also mentioned as an additional source of uncertainty affecting global economics, particularly concerning oil prices and other commodities. This analysis reflects a complex scenario where inflation risks and monetary policies are constantly reassessed within a globally uncertain economic and political landscape.