US Treasury Secy expects 'several more months of rapid inflation'

Washington, July 16 US Treasury Secretary Janet Yellen said that she expects "several more months of rapid inflation" before moderating to normal levels.

"I think we will have several more months of rapid inflation. So I'm not saying that this is a one-month phenomenon," Xinhua news agency reported on Friday citing Yellen as saying in an interview with CNBC.

"But I think over the medium term, we'll see inflation decline back toward normal levels. But, of course, we have to keep a careful eye on it," she said.

Yellen noted that measures of inflation expectations still "look quite well contained" over the medium term and those expectations are actually a driver of price setting behaviour.

"So it is important that we monitor it carefully. But I believe fundamentally, you know, that this is something that will settle down," she said.

US consumer prices jumped 0.9 per cent in June, recording the largest one-month increase and largest 12-month increase in roughly 13 years, the Labour Department reported on Tuesday.

Over the last 12 months, the consumer price index soared 5.4 per cent, the largest 12-month increase since a 5.4 per cent increase for the period ending August 2008.