Janet Yellen, Secretary of the Treasury, underlined the crucial role a cooling labor market is playing in slowing US inflation.
In an interview with Bloomberg News on Tuesday, Yellen said that “the intense demand for hiring from companies has eased. The job market is cooling down without there being any real danger.”
In addition to changes in the labor market, Yellen listed a number of factors that are helping to keep cost pressures down. Among these, you cited housing costs and car prices, which you believe are likely to continue to exert downward pressure on costs.
Yellen also suggested that corporate profit margins could play a role here. However, she urged not to be overly optimistic based solely on the June consumer price data. She acknowledges the importance of looking at the bigger picture when it comes to analyzing US inflation.