By David Lawder and Andrea Shalal
MARRAKECH, Morocco (Reuters) -U.S. Treasury Secretary Janet Yellen told Reuters on Friday that she still believes U.S. shelter inflation will continue to ease despite new consumer price data on Thursday showing a jump in housing costs, but the process may take some time.
“We do definitely believe that’s coming down over time,” Yellen said in an interview on the sidelines of the International Monetary Fund and World Bank meetings in Morocco.
After generally easing through much of the year, shelter costs rose in September by the most in six months, interrupting that downward trend for the moment at least and acting as the largest contributor to a higher-than-expected overall inflation print for the month.
Recent comments from Federal Reserve officials, and minutes of their latest meeting last month released on Wednesday, have shown policymakers beginning to fret that the resilience of the housing market was a possible risk to their otherwise optimistic outlook that inflation will over time return to the central bank’s 2% target.
Yellen has long said that housing costs, will ease over time, helping to bring down core inflation, and said Thursday’s CPI report has not deterred her from that view.
“I think we have very good reason to believe, with lags, that will come down, and I don’t think there’s anything in the report that would cause us to think that’s a mistake in judgment,” Yellen said. “It’s just a lengthy process.”
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