Treasury Secretary Janet Yellen admitted Tuesday that she was “wrong” last year in believing that U.S. inflation would not be a long-term problem.
“ “I was wrong about the way inflation would go.” ”
“I was wrong about the way inflation would go,” Yellen said in a CNN interview with Wolf Blitzer on Tuesday night. “There have been unexpected and big shocks to the economy that have raised energy and food prices, and bottlenecks that have severely affected our economy that at the time did not fully understand.”
Last year, before Russia invaded Ukraine and new variants of COVID-19 swept the world, Yellen said inflation posed a “small risk” and did not anticipate it being “a problem.”
Yellen said the Biden administration is now focused on taking steps to reduce inflation and is confident the Fed will do its job. “The Federal Reserve is taking the steps it needs to take. It’s up to them to decide what to do,” he said.
Earlier Tuesday, President Joe Biden met with Fed Chairman Jerome Powell as a show of support and told reporters he intended to give the Fed “the space they need to do their job. “.
“The Federal Reserve has the primary responsibility for controlling inflation. My predecessor downgraded the Fed and former presidents have tried to influence their decisions inappropriately during periods of high inflation,” Biden wrote in an article. opinions published Monday in the Wall Street Journal. “I will not do that. I have appointed highly qualified people from both sides to lead this institution. I agree with their assessment that the fight against inflation is our main economic challenge right now.”