Washington – Treasury Secretary Janet Yellen told CNN on Tuesday that she was wrong when she said last year that inflation was only a small risk and was not likely to be a problem.
Yellen commented on Wolf Blitzer after the host played clips of Yellen calling the risk of inflation “small” and “manageable” and said he did not “anticipate that inflation would be a problem”. Federal officials said inflation has been transitory in the past, but since then, inflation has reached levels not seen in 40 yearswith the Federal Reserve and policymakers fighting to overthrow it.
“Well, look, I think I was wrong then about the path that inflation would take,” Yellen said Tuesday. “As I mentioned, there have been unforeseen and big shocks to the economy that have raised energy and food prices, and supply bottlenecks that have severely affected our economy that I didn’t understand at the time. “But we recognize that now.”
“The Federal Reserve is taking the steps it needs to take,” he added. “It’s up to them to decide what to do. And for our part, President Biden is focused on complementing what the Fed is doing with actions we can take to reduce the costs that Americans face in spending. “Prescription drugs are an example. Health spending is another example. Utility bills,” he added.
Yellen said it looks like inflation stabilizingbut warned that Russia’s war against Ukraine could still have some volatile effects on the US and the global economy.
“Underlying inflation has come down,” he said. “It’s still too high, but in recent reports we’ve seen it go down, and that’s an encouraging sign. But oil prices are high. Russia continues to wage war on Ukraine. We’re trying and Europeans are trying to address that. and limit [Putin’s] ability to make this war. There can be impacts on energy and food prices that we can do all we can nationally to control. The president has authorized the historic release of oil from the Strategic Oil Reserve. but we can’t rule out more shocks, “Yellen said.
Inflation remains one of the most urgent concerns for voters heading to the November midterm elections. And consumers expect costs to rise by more than 7% in 2023, according to a recent Conference Board report, a business group. What remains to be seen is whether the Federal Reserve, as it is raises interest ratesyou can navigate a smooth landing and avoid a recession.
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