U.S. Treasury Secretary Janet Yellen visited Wake Tech Community College in Raleigh to discuss concerns about the rising cost of living and what she sees the Biden administration doing about it.
“The No. 1 priority of the Biden-Harris administration is to lower the costs that households face,” Yellen said.
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Yellen mentioned how people are struggling with the costs of energy bills, child care bills, health costs and housing costs.
“There is a broad agenda that we look forward and we’re seeing implemented to help in all these different areas,” Yellen said.
On Thursday, Yellen acknowledged that while the Federal Reserve controls interest rates, there are things the federal government can do that have an impact on inflation.
“When it comes to the high-level of costs in some areas like we’ve been discussing, the federal government can certainly play a role,” Yellen said.
Yellen said the current administration is supportive of a child-tax credit that was in effect during the pandemic.
“We’d like to see it brought back again,” Yellen said.
Yellen also mentioned the high costs of child care.
“It really keeps some people out of the workforce entirely,” Yellen said.
The Federal Reserve is expected to lower interest rates when it meets on Sept. 17-18. The average rate on a 30-year mortgage in the U.S. remained flat this week at 6.35% from last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.12%.
"This is a decision for the Federal Reserve," Yellen said. "They make their own independent judgment.
"[I] don’t want to comment on the timing, but Chair [Jerome] Powell has been clear, most recently, in his comments at Jackson Hole, [Wyoming], that the time has come to begin lowering interest rates."
Signs of waning inflation and a cooling job market have raised expectations the Federal Reserve will cut its benchmark interest rate next month for the first time in four years.
"That expectation, after all inflation has come down, [the] labor market doesn't look like it's a source of inflationary pressure," Yellen said. "[Powell has] made clear that it's important for the job market to remain strong."
The Bureau of Labor Statistics is due to release a jobs report at 8:30 a.m. ET Friday that will likely determine the size of the Fed’s rate cut.
"It's up to them to decide on the pace, but mortgage rates reflect market expectations of the path of monetary policy, of interest rates over time," Yellen said. "They’ve come down considerably.
"They may have more to come down over time, but we’ve already seen an expectation of lower interest rates feed through into some improvement for households and mortgage rates."
Yellen credited the current administration with bringing down expenses for Americans by:
- Lowering energy costs: Yellen cited data published by the IRS showing 3.4 million American families claimed $8.4 billion in residential clean energy and home energy efficiency tax credits for the 2023 tax year. Yellen said families claiming the credits have claimed an average of $5,000. Yellen said in North Carolina, there were 90,000 families that took advantage of the credits.
- Scaling up manufacturing and clean energy
Yellen said it would be a “historic mistake” to eliminate the tax credits.
WRAL News asked Yellen about how she thinks the winner of the 2024 presidential election between Republican nominee Donald Trump and Democratic nominee Kamla Harris will impact current plans to address inflation.
Yellen said Republicans tried to repeal the Inflation Reduction Act, which she said brought down costs for American families and allowed for investment in clean energy industries.
“I described some of the benefits we’re seeing in North Carolina and across the country, I think, that would both raise the costs for households and also be negative in terms of creating good, new jobs,” Yellen said if the act was repealed.
Yellen said the Inflation Reduction Act helped improve how the IRS operates and the IRS’ customer service.
“Importantly, collecting taxes from millionaires and billionaires,” Yellen said.
Yellen said the IRS has collected around $1.3 billion from high-income taxpayers who either failed to file their tax returns or had been assessed taxes but had not paid them.
“That can help to reduce the burdens on regular people who pay their taxes when they’re due,” Yellen said.
Yellen said the Inflation Reduction Act enabled the federal government to negotiate with pharmaceutical companies to bring down the costs of expensive prescription drugs.
“That’s resulting in savings for everyone on Medicare as well as the federal government,” Yellen said.
Yellen also mentioned the monthly cap of $35 for insulin.
Yellen addresses housing and the fentanyl crisis
Yellen also credited the current administration with addressing the need for affordable housing. She said the administration’s budget proposal would create 2 million affordable housing units and offer help for first-time homebuyers.
“We’re using every tool that is at our disposal and trying to work with Congress. We do need help from Congress to do some of this, but we’re using every tool to bring down the costs that we are know are burdening American families,” Yellen said.
Yellen also explained how the U.S. government is working to stop the import of fentanyl.
“It’s a human tragedy and I know that many people, many families here in North Carolina but also around the country have been affected by it, and we’re using every tool that our government and the U.S. Treasury has to try to address it,” Yellen said.
Yellen said the U.S. would work with Mexico to stop the illegal trafficking. She also said the U.S. was working with China so the country would to stop sending “precursor chemicals” to Mexico that are used to make fentanyl.