The Minister of Finance admitted that he was wrong in the “way inflation will go”

U.S. Treasury Secretary Janet Yellen acknowledged on Tuesday that she had failed to predict how long high inflation would continue to haunt U.S. consumers as the Biden administration worked to curb growing political responsibility.

US Treasury Secretary Janet Yellen admitted on Tuesday that she could not predict how long high inflation would last the plague of American consumers as The Biden Administration works to curb growing political responsibility.

“I think I was wrong then about the direction of inflation,” Ellen told Wolf Blitzer on CNN’s Situation Room when asked about her comments from 2021 that inflation poses only a “small risk.”

The recognition was the latest indication that the administration’s expectations of economic normalization had been shattered by an ongoing pandemic and war in Europe.

“As I mentioned, there were unforeseen and big shocks in the economy, which increased energy and food prices, as well as supply bottlenecks, which greatly affected our economy, which I – at the time – did not fully understand, but we recognize that now, ”she said.

Yellen and other White House officials once described inflation as a temporary side effect of the economy returning to normal after the pandemic, pointing to supply chain entanglements and demand that exceeded supply.

However, in a few months inflation reaches a maximum of almost four decades.

Recent economic figures have shown optimism that inflation may have reached a 40-year high in March, although economists warn it may take a long time before inflation returns to healthy levels. In response, the White House is launching a monthly effort to signal a greater focus on the economy.

The push began Monday with the publication of an article by President Joe Biden The Wall Street Journal and continued Tuesday in the Oval Office between Biden, Federal Reserve Chairman Jerome Powell and Yellen.

The finance minister said Biden at the meeting noted that he “shares the Fed’s priority in reducing inflation and that he firmly believes in his support for the Fed’s independence to take the necessary steps.”

A Treasury spokesman told CNN in a statement that Yellen’s comments were in the context of certain unforeseen events that eventually hit the economy.

“The secretary noted that the economy has been in turmoil, exacerbating inflationary pressures that could not have been foreseen 18 months ago, including Russia’s decision to invade Ukraine, several successive COVID options and a blockade in China,” the spokesman said. “As she also noted, there has been historic growth and record-breaking jobs, and now our goal is to move towards steady and steady growth as inflation declines.”

The Fed under Powell criticized as slow in the fight against high inflation by ending emergency support for the economy and starting to raise interest rates. However, the Fed has promised to raise interest rates quickly and earlier this month raised rates by half a percentage point for the first time since 2000. The US Federal Reserve has signaled a further aggressive rate hike in the coming months.

Apart from Yellen, a number of other economic aides have filled the television news in hopes of telling that Biden is looking to lower prices for petrol, food and housing, which has led to decline in its approval ratings.

The president, Yellen said Tuesday, knows “what an important and huge burden inflation has on American households.”

The-CNN-Wire
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