The Biden administration announced a series of new efforts to boost housing affordability, including $100 million to help finance affordable housing through the Community Development Financial Institutions Fund and calling on Federal Home Loan Banks to do more to boost their support of housing programs. US Treasury Secretary Janey Yellen detailed the efforts in a speech in Minneapolis, Minnesota. In an exclusive interview with Yahoo Finance’s Jennifer Schonberger, Yellen says the initiatives are not a "silver bullet" for housing affordability but that the administration wants to use "every tool that we have" to lower the cost of buying a home. Housing costs have been a big factor in propping up inflation. Yellen expects inflation to come down, saying, "As we get into next year, I believe that inflation will go back to the Fed’s 2% target." One thing she pointed to was the lag in rental prices, noting that many declines would only be seen when renters renew their leases, meaning that it could take longer for rent decreases to appear in the inflation data. Yellen, a former Federal Reserve chair, declined to comment on when she thinks the Federal Reserve will cut interest rates. She did say, however, that the economy is strong and that though growth may be slowing, she doesn’t "see the basis, really, for a recession in the outlook." On the deficit, Yellen thinks that a debt crisis in the United States can be avoided as long as there is deficit reduction. She does bring up the expiration of the Tax Cuts and Jobs Act of 2017, saying that President Biden wants to preserve the tax cuts for those making under $400,000 but that "he would raise funds in order to find ways to cover that so that it doesn’t just bust the deficit." Yellen demurred on commenting on the policies of a potential Trump administration, but did say the Tax Cuts and Jobs Act promised investments she claims never came and that "it gave huge tax breaks to corporations and to wealthy individuals, and it resulted in an enormous increase in the deficit and lowered tax revenues below historic norms."
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