Treasury Secretary Janet Yellen gave her most direct admission yet that she made an incorrect call last year in predicting that elevated inflation wouldn’t pose a continuing problem.
“I was wrong about the path inflation would take,” Yellen said in an interview that aired Tuesday on CNN. “I didn’t fully understand” the circumstances, and there were unanticipated shocks that later worsened the situation, she said.
New variants of Covid, lockdowns in China and Russia’s war on Ukraine have all imposed shocks on the economy, the Treasury chief said after attending a meeting at the White House with President Joe Biden and Federal Reserve Chair Jerome Powell to address inflation.
Biden said Tuesday that his his role as president is to give the Fed “the space they need to do their job, adding, “I’m not going to interfere with their critically important work.” Yellen said that the Fed is taking the steps it needs to to stem inflation.
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