U.S. Treasury Secretary Janet Yellen said it’s “unlikely” that market interest rates will return to levels that prevailed before the COVID-19 pandemic triggered a wave of inflation and higher yields.

Asked why White House projections released Monday showed markedly higher expectations for interest rates in coming years compared with projections a year ago, Yellen said the new numbers were in line with private-sector forecasts.

“I think it reflects current market realities and the forecasts that we’re seeing in the private sector — that it seems unlikely that yields are going to go back to being as low as they were before the pandemic,” Yellen told reporters Wednesday in Elizabethtown, Kentucky.

Inflation ticked up in February, backing caution from Fed

Inflation sped up slightly in February on an overall basis and a closely watched measure of underlying price increases was firmer than economists had expected.

The fresh data underscores that fully returning inflation to a normal pace is likely to be a bumpy process — and backs up the Federal Reserve’s decision to proceed carefully as officials consider when and how much to lower interest rates.

The consumer price index climbed 3.2% last month from a year earlier, up from 3.1% in January. That’s down notably from a 9.1% high in 2022, but it is still quicker than the roughly 2% that was normal before the pandemic.

After stripping out volatile food and fuel costs for a better sense of the underlying trend, inflation came in at 3.8%, slightly faster than economists had forecast. And on a monthly basis, core inflation climbed slightly more quickly than anticipated as airline fares and car insurance prices increased, even as one closely watched housing measure climbed less rapidly.

Taken as a whole, the report is the latest sign that bringing inflation fully down is likely to take time and patience.

“It just is going to underscore the Fed’s cautiousness regarding the inflation outlook,” said Kathy Bostjancic, chief economist at Nationwide Mutual.

Dollar Tree closing nearly 1,000 stores in the next several years

Dollar Tree reported a surprise fourth-quarter loss and will close nearly 1,000 stores after the discount retailer slashed the value of a rival chain it acquired almost a decade ago.

Dollar Tree plans to close about 600 Family Dollar stores in the first half of this year and 370 Family Dollar and 30 Dollar Tree stores over the next several years.

Dollar Tree acquired Family Dollar for more than $8 billion in 2015 after a bidding war with rival Dollar General, but it has had difficulty absorbing the chain.

“This dramatic cull is the coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015,” wrote Neil Saunders, managing director of GlobalData. “Basically, almost 10 years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around,” Saunders said.

Saunders said in an emailed statement that nearly 12% of current Family Dollar stores will be closing over the next three years.

Body Shop shuts down its entire operation in the United States

The Body Shop has shut down all of its U.S.-based operations and will be closing dozens of Canadian store locations as it files for bankruptcy.

In a news release earlier this month, the U.K.-based cosmetics company announced that its U.S. subsidiary is no longer operational, effective March 1. It added that 33 of its 105 stores in Canada will begin liquidation sales immediately and “online sales via Canada’s e-commerce store will stop,” but that all Canadian locations will remain open for the time being.

High inflation in recent years has hurt traditional retailers, particularly those like The Body Shop that predominantly operated out of malls and were aimed at the struggling middle class.

Compiled from Bloomberg, New York Times and CNN reports.