Yellen says ‘more work’ remains in effort to curb US inflation

Treasury Secretary Janet Yellen, reacting to data showing another faster-than-anticipated increase in consumer prices, said the US has “more work to do” to restrain the worst burst of inflation since the 1980s.

“While there have been favorable indicators on easing of supply chain bottlenecks and softening of labor market pressures, we need to see sustained progress,” Yellen said at the start of a meeting with European commissioners Valdis Dombrovskis and Paolo Gentiloni in Washington.

The US Labor Department reported earlier on Thursday that consumer prices rose 8.2% in September from a year earlier, the seventh straight month above 8%. Core inflation, which strips out the typically more volatile components of food and energy, rose to 6.6%, its highest measure in 40 years.

The data was widely interpreted as all but ensuring the Federal Reserve would raise interest rates by another three-quarter of a percentage point when it next meets Nov. 1-2. That would be the fourth straight hike of that magnitude, and traders boosted bets on a fifth in December.

The Fed’s hikes, by contributing to the US dollar’s strength, have put stress on governments around the world trying to control inflation in their own economies and, in some countries, struggling to service dollar-denominated debt. Those concerns have emerged this week in Washington where officials are gathered for the annual meetings of the International Monetary Fund and World Bank.

Yellen, in separate remarks this week, has called on creditor nations to do more to provide debt relief for low and middle-income countries, calling out China in particular for failing to participate in those efforts.

In her comments Thursday, the Treasury chief also lauded the “significant progress” made by countries seeking to punish Russia through sanctions for its invasion of Ukraine.

She said Russia has been largely cut off from Western capital and has struggled to equip its military in Ukraine. “Constraints on Russia’s real economy will create a drag on Russia’s growth prospects for years to come,” she said.

Yellen also thanked European Union countries for joining the effort to cap the price on Russian oil exports.

“This cap will help us keep global energy markets well-supplied even as we cut into Putin’s most important source of revenue,” she said. “I’m optimistic about the progress we are making on this together.”