US inflation will be much lower by 2023 end: Official

On Sunday, US Treasury Secretary Janet Yellen forecast a substantial reduction in 2023 US inflation levels, barring an unexpected shock.

"I believe by the end of next year you will see much lower inflation if there's not ... an unanticipated shock," she told CBS' '60 Minutes', in an interview released Sunday.

When asked about the likelihood of recession, the former Federal Reserve chair said:

"There's a risk of a recession. But ... it certainly isn't, in my view, something that is necessary to bring inflation down."

Yellen's comment comes days before the Fed is expected to slow the aggressive pace of interest rate increases it has pursued this year. Fed Chair Jerome Powell has telegraphed a smaller, half-of-a-percentage point increase in the policy rate, to a range of 4.25-4.5 per cent, after four 75-basis point hikes this year.

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Yellen told CBS that economic growth was slowing substantially, inflation was easing and she remained hopeful that the labour market would remain healthy.

She said she hoped that the spike in inflation seen this year would be short-lived, and said that the US government had learned "a lotta lessons" about the need to curtail inflation after high prices seen in the 1970s.

Shipping costs had come down and long delivery lags had eased, while gasoline prices at the pump were "way down."

"I think we'll see a substantial reduction in inflation in the year ahead," she said.

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