Source: Golden Ten Data
Continued inflation has weakened Biden's approval rating, and Yellen also acknowledged that voters' concerns about a “sharp rise” in the cost of living are reasonable.
US Treasury Secretary Yellen said that the “sharp rise” in the cost of living is “a problem for many people.” Continued inflation has weakened incumbent President Joe Biden's approval rating before the November election.
Yellen acknowledged that despite strong wage growth in recent months, prices for housing and daily necessities are still high for many voters.
“They take this into account when buying food, and the same is true when renting. Due to high mortgage interest rates, it is difficult for young people who want to buy a house to enter the market,” Yellen said in an interview with the Financial Times on Thursday.
She said, “Although wages have risen sharply, and at least the average increase has exceeded the price increase, prices that are important to people have also risen sharply, and they have risen in a relatively short period of time. People can clearly feel it.”
As the highest-ranking US economic official made these remarks, public opinion polls showed that with just over five months left until the presidential election, Biden continues to lag behind his Republican opponent Trump.
The survey also consistently showed that respondents did not believe Biden contributed to the strong performance of the US economy in recent months, and inflation is still one of their biggest concerns.
According to a recent poll by the Financial Times and the University of Michigan's Ross School of Business, 43% of voters trust Trump's handling of the economy, while 35% trust Biden. Only 28% of voters think Biden helped the economy.
Since Biden took office, the US Consumer Price Index (CPI) has risen by more than 19%, with prices for essential goods such as food and gasoline rising sharply.
According to data released by the “Swing State Project” (Swing State Project) on Thursday, 54% of voters said the cost of living is the best measure of economic strength, and 59% of voters think Biden can control inflation.
The Federal Reserve is expected to keep interest rates at their highest level in 23 years over the next few months, a blow to Democrats who want to see a sharp drop in mortgage interest rates and other borrowing costs before the election.
The Republican Party used voters' concerns about high prices, criticized Biden's climate and other policies for driving up prices, and claimed that the Democratic Party had separated from the general public.
However, former Federal Reserve Chairman Yellen expressed sympathy for the pressure faced by Americans, while pointing out that the government is making efforts to reduce costs, such as eliminating so-called “garbage charges,” which secretly increase additional costs for American consumers.
Yellen said in Stresa, Italy: “The cost of living is an issue that many people face, so I think people's concerns are reasonable. President Joe Biden understands this and intends to use the tools we have at our disposal to solve this problem as best we can. To that end, he did a lot of important things.”
Biden blamed companies for part of the inflation, accusing them of making profits and triggering “shrinking inflation” — the practice of manufacturers reducing the size or quality of products but charging consumers the same price.
As the economy recovered from the COVID-19 pandemic, the US inflation rate hit a decades-high in 2022. The inflation rate fell sharply last year, but it is still above the Federal Reserve's 2% target.
Most economists believe that price spikes are mainly a global phenomenon, driven by geopolitical factors such as shortages of certain commodities and rising oil prices due to the pandemic.
However, US inflation has proven to be more sticky than elsewhere, with some economists blaming it on America's strong labor market, while others blame aggressive fiscal stimulus from the Biden and Trump administrations.
editor/tolk