US Treasury Secretary Janet Yellen admitted Tuesday that she had failed to anticipate how long high inflation would continue to plague American consumers as the Biden administration works to contain a mounting political liability.
“I think I was wrong then about the path that inflation would take,” Yellen told CNN’s Wolf Blitzer on “The Situation Room” when asked about her comments from 2021 that inflation posed only a “small risk.”
The admission was the latest indication that the administration’s expectations of a normalizing economy were thrown into disarray by the continuing pandemic and the war in Europe.
“As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn’t — at the time — didn’t fully understand, but we recognize that now,” she said.
Yellen and other White House officials once framed inflation as a temporary side effect of the economy returning to normal following the pandemic, pointing to snags in supply chains and demand outstripping supply.
Yet months later, inflation is running at a near-four-decade high.