Treasury Secretary says spending packages will change U.S. economy for the better

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FILE PHOTO: Treasury Secretary Janet Yellen attends the House Financial Services Committee hearing in Washington

WASHINGTON – U.S. Treasury Secretary Janet Yellen said on Thursday that President Joe Biden’s social spending and infrastructure packages would change the shape of the U.S. economy for the better and drive inflation down.

Biden on Thursday unveiled a $1.75 trillion economic and climate change plan that he said unified Democrats and which was then was quickly rebuffed by members of his own party.

The proposals represented “something truly historic: a new period of investment in economic growth for all Americans across the country,” Yellen said in a statement.

U.S. inflation accelerated last month, with consumer prices rising 5.4%.

“This is really because of the pandemic,” Yellen told CBS News in an interview published separately on Thursday, when asked about higher consumer prices and if inflation would decline next year.

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“And as we succeed in the vaccination campaign and other countries do as well and life goes back to normal, I truly believe that this will subside and Americans will see inflation rates much closer to the 2% that we want and they’re accustomed to,” Yellen added.

(Reporting by Kanishka Singh, Doina Chiacu and Chris Gallagher; additional reporting by Aakriti Bhalla; Editing by Bill Berkrot)