Treasury Secretary Janet Yellen waded into the “transitory” versus “persistent” inflation debate on Tuesday, insisting it’s reasonable to view the current price spike as temporary even if it doesn’t abate within the next few months. “Supply bottlenecks have developed that have caused inflation,” Yellen said an an interview on CNBC’s “Squawk Box” on Oct. 5. “I believe that they’re transitory, but that doesn’t mean they’ll go away over the next several months.” Yellen’s remarks come as debate swirls around the durability of the current inflationary spell. Federal Reserve officials have repeatedly characterized it as “transitory” though they have increasingly expressed concern about the risk of a de-anchoring of inflationary expectations. That’s where confidence in the “transitory” narrative falls and people start to believe and behave as if inflation will be far stickier than previously believed, impacting wage and price-setting behavior and potentially even sparking the kind of upward wage-price spiral …
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