President Biden’s administration finally admitted they were wrong about inflation – and it’s not going anywhere.
Treasury Secretary Janet Yellen admitted this week that she and the rest of the Biden team were massively wrong about just how serious inflation is.
“I was wrong then about the path that inflation would take,” Yellen told CNN’s Wolf Blitzer. “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.”
Yellen also shifted the primary responsibility of fighting inflation onto the U.S. Federal Reserve.
“The Federal Reserve is taking the steps that it needs to take,” she added. “It’s up to them to decide what to do. And, for our part, President Biden is focused on supplementing what the Fed does with actions we can take to lower the cost that Americans face for important expenditures they have in their budgets.”
Yellen’s admission came after the CNN host Wolf Blitzer asked her about comments made back in 2021 where she labeled rising inflation as a “small risk.”
Other members of the administration, including President Biden himself. Downplayed the skyrocketing inflation for months last year, insisting the steady rise in consumer goods was only “transitory” and unavoidable. The administration even went so far as to pitch the situation as preferable.
Officials characterized the problem as only a temporary consequence of the economy’s recovery from the COVID-19 pandemic, as surging demand outstripped supply and the global supply chain suffered.
That relaxed attitude towards inflation backfired big time when it finally reached rates not seen in 40 years thanks to the administration’s continued exorbitant social spending.
In a clarifying statement issued to CNN following the interview, a Yellen spokesperson attempted to reframe her boss’ comments in a more flattering light.
“The Secretary was pointing out that there have been shocks to the economy that have exacerbated inflationary pressures which couldn’t have been foreseen 18 months ago, including Russia’s decision to invade Ukraine, multiple successive variants of COVID, and lockdowns in China,” the spokesperson said. “As she also noted, there has been historic growth and record job creation and our goal is now to transition to steady and stable growth as inflation is brought down.”
Yellen’s remarks came the same day that Biden met with her and Federal Reserve Chairman Jerome Powell in the Oval Office. The president’s team has been busy shifting blame for inflation from the COVID-19 pandemic to the Russian war in Ukraine.
A recent report from Bloomberg found that record-high inflation rates “will mean the average U.S. household has to spend an extra $5,200 this year ($433 per month) compared to last year for the same consumption basket.”