In a rare admission of error from the Biden administration, Treasury Secretary Janet Yellen said on Tuesday that she got it wrong on inflation.
As inflation began to rise last year, the stock response from the Biden White House was that it was transitory and nothing much to worry about. Inflation has hit 40-years highs this spring.
“I think I was wrong then about the path that inflation would take,” Yellen told CNN in an interview with Wolf Blitzer on “The Situation Room,” responding to a question about her 2021 comment that inflation was a “small risk.”
But Yellen then steered into the more usual White House territory by saying inflation is the result of changes no one could have expected.
“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.
A Treasury representative later gave CNN a statement elaborating on the point.
“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 representative said.
“As [Yellen] 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.”
On Tuesday, White House press secretary Karine Jean-Pierre distanced President Joe Biden from any responsibility for inflation, according to Fox Business.
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Biden’s policies “helped the economy get back on its feet. That’s what his policy has, his policies has done,” Jean-Pierre said in response to a question from Fox News corespondent Peter Doocy.
“When we talk about the gas prices right now, this is indeed Putin’s gas hike … We have seen about 60 percent increase in the past several months because of the amassing and his invasion of Ukraine.”
A report in Politico noted that Biden has blamed corporations and top executives for inflation, which has resulted in a climate of cold, distant relations with the financial sector.
“They said everything was going to be different under Biden and they would be more engaged with us, and they weren’t,” Politico quoted what it said was the CEO of one of the country’s largest banks, whose name was not used.
“Now they are going to get slaughtered in the midterms. And they deserve to get slaughtered because they haven’t really accomplished anything except maybe increasing inflation.”
Biden issued an Op-Ed in the Wall Street Journal that praised his policies and took aim at Republicans and former President Donald Trump.
“I ran for president because I was tired of the so-called trickle-down economy. We now have a chance to build on a historic recovery with an economy that works for working families. The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down. That is why I have made tackling inflation my top economic priority,” Biden said.
Biden stated in the Op-Ed that low job creation numbers are part of his goals for the economy, saying “growth will look different.”
