Inflation is coming down faster than most economists expected, but Americans hoping for a widespread drop in prices may be disappointed, according to Treasury Secretary Janet Yellen.
While testifying before the Senate Banking Committee on Thursday, Yellen admitted that prices for most items are unlikely to return to where they were before the inflation crisis began in 2021.
“I don’t expect the level of prices to go down. Some prices will be higher than they were before the pandemic, and will stay higher,” Yellen said during a contentious exchange with Sen. John Kennedy, R-La. “But wages have risen considerably, and the pace of price increases has now receded over the past six months.”
Prices for everything including groceries, new cars and health insurance surged in 2021 and 2022 as the result of rampant inflation, which was caused by pandemic-induced disruptions in the global supply chain, an extremely tight labor market and increased consumer demand fueled in part by stimulus cash.
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