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Treasury Secretary Janet Yellen Says Many Americans Concerned About High Costs

The high cost of essentials like food, rent and mortgages are weighing on many American consumers, Treasury Secretary Janet Yellen said Thursday (May 23).

Yellen said the price increases have been “substantial,” rapid and noticeable to consumers, the Financial Times reported Thursday.

The Consumer Price Index is up more than 19% since President Joe Biden took office, interest rates are the highest they’ve been in 23 years, and inflation remains above the Federal Reserve’s target of 2%, the report said.

While inflation has been a global problem, it has lasted longer in the United States because of a strong labor market and fiscal stimulus programs, according to the report.

“The cost of living is a problem to a lot of people,” Yellen said, per the report. “So, I think this is a concern that people legitimately have.”

Yellen said the Biden administration has responded to the price increases by combating “junk fees” and by criticizing companies for “shrinkflation,” per the report.

The report came days after the Federal Reserve released a report showing that inflation remains the top financial concern of consumers. It found that 65% of consumers said higher prices have hurt them financially, with 19% saying their situations were “much worse.”

The latest Index of Consumer Sentiment published by the University of Michigan found that consumers are souring about the near-term outlook on inflation, job prospects and interest rates.

The index dropped to its lowest reading in six months, with consumers’ year-ahead inflation expectations rising from 3.2% last month to 3.5% this month and long-term inflation expectations inching up from 3% last month to 3.1% this month.

PYMNTS Intelligence found in January that just 18% of wage earners said their incomes have kept up with inflation. Even among high earners, only 27% said that was the case, according to “New Reality Check: The Paycheck-to-Paycheck Report: Why One-Third of High Earners Live Paycheck to Paycheck.”

The report also found that 62% of all consumers, and more than one-third of those earning more than $200,000 a year, said they live paycheck to paycheck.