Yellen Dismisses Hotter-Than-Expected Inflation Data, Says Market Sell-Off a ‘Mistake’

Treasury Secretary Janet Yellen shrugged off the latest hotter-than-expected inflation data, arguing the financial markets made the “mistake” of concentrating on short-term blips rather than the downward trend of the consumer price index (CPI). At the Detroit Economic Club alongside Gov. Gretchen Whitmer (D-Mich.), Ms. Yellen stated that the January CPI report was a “tad higher” than observers expected, resulting in a sharp stock market sell-off. “I think it is a tremendous mistake to focus on minor fluctuations and to fail to see the longer-term and bigger trends,” she said. “The trend here is that inflation is moving decisively down.” The annual inflation rate eased to 3.1 percent, higher than the consensus estimate of 2.9 percent. The core CPI, which strips the volatile food and energy sectors, was unchanged at 3.9 percent and higher than economists’ projections of 3.7 percent. In addition, the Federal Reserve’s (Fed’s) preferred supercore inflation gauge, concentrated on labor-intensive services excluding housing and energy, climbed to 4.3 percent year-over-year....