“Demand and supply is largely driving inflation,” Yellen said at a New York Times hosted event on Thursday, when asked about the view that corporate greed is a key cause. She said that it’s true that price-to-cost margins have gone up, but she said that’s not what’s driving inflation.

President Joe Biden has threatened price-gouging probes in gasoline, and House Speaker Nancy Pelosi backed a bill in her chamber aimed at combatting that practice — saying last month that there was “a major exploitation of the consumer” taking place. 

Yellen said that she supports a “strong” antitrust policy. She reiterated that, in the battle against inflation, the administration looks “first and foremost” to the Federal Reserve to deal with it.

She warned that there’s a risk of higher food and energy prices, including for gasoline. But she said there’s “nothing to suggest a recession is in the works.”

Bankers’ Views

Yellen said she’s spoken with JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon — who last week warned a “hurricane” may be coming for the economy — and other major bankers, who say that households and credit quality are in good shape.

There’s still a large “buffer-stock of savings” that will support spending going forward, Yellen said. 

“I absolutely expect growth to slow down,” Yellen also said, adding that she wants to see a deceleration in the job market given how tight it is.

With unemployment historically low, the Treasury secretary said it’s “amazing” how pessimistic US households are. 

Yellen again defended her support for Biden’s policies last year, even knowing now how inflation has spiked. “I wouldn’t do it differently,” she said. 

Republicans have blamed Biden’s $1.9 trillion pandemic-relief package for triggering the biggest consumer-price surge in four decades.