In a pre-taped interview with CBS’s “Face the Nation” that aired on Sunday, Yellen was asked whether she is confident that the inflation rate will be back to normal levels by next November, prompting her to say the “pandemic has been calling the shots for the economy and for inflation.”
“If we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do,” Yellen told host Margaret Brennan. “I think it’s – it’s important to realize that the cause of this inflation is the pandemic.”
Brennan then listed off many grocery items that are facing skyrocketing prices, including milk, eggs and coffee, as well as gas, before asking, “When does it get better? When do those spikes abate?”
“When the economy recovers enough from COVID that demand patterns – people go back to eating out, traveling more, spending more on services, and the demand for products, for goods begins to go back to normal,” Yellen said. “Labor supply has been impacted by the pandemic. Labor force participation is down. It hasn’t recovered.”
She went on to reiterate that if they are “successful” with the pandemic response then she expects prices to go back to “normal.”
Later in the interview, Brennan said China’s leaders had repeatedly called for the Trump-era tariffs on Chinese products to be lifted and asked Yellen whether prices of groceries or products would go down if they followed through with this.
“It would make some difference,” Yellen said. “Tariffs do tend to raise domestic prices. We put those tariffs in place. President Trump and his administration did in retaliation for unfair trade practices.”
When asked whether the tariffs should stay in place, Yellen said U.S. Trade Representative Katherine Tai was revisiting the phase-one trade deal and said it is “certainly something that’s under consideration.”
White House national economic director Brian Deese appeared on CNN’s “State of the Union” earlier Sunday morning, where he touted the Democrats’ $1.75 trillion social spending and climate package as the solution for the inflation increase.
“By providing affordable child care, affordable elder care, we’re going to help get those people back into the workforce, which will reduce price pressures while also reducing the practical costs that Americans face,” Deese said. “That’s the case we’re going to make and that’s the case why delivering right now for the American people is the right thing to do.”
“We’re confident this bill, as it moves through the process, is going to be fully paid for,” he added. “And not only that, it’s actually going to reduce deficits over the long term.”
Fox News’ Jessica Chasmar contributed to this report.