Yellen expects inflationary pressures to subside by the second half of 2022

US Treasury Secretary Janet Yellen said today that she continues to see inflation as a temporary result of severe bottlenecks in the supply chain and expects price increases to return to normal during 2022 as people return to work and demand shifts to services. "As demand shifts to services and supply has an opportunity to adjust, I think price increases will return to normal and we'll see lower monthly inflation rates I think by the second half of 2022," Yellen told CNN.

Inflationary pressures are fueled by a shortage of semiconductors and rising energy prices, but energy prices will begin to moderate in the coming months, Yellen said, adding that she expected US GDP growth to rise and unemployment to fall further as the pandemic subsides and people return to work.