It’s pretty rare for a member of the Biden administration, let alone the federal government, to admit when they were wrong about something, but on Tuesday, Treasury Secretary Janet Yellen confessed that she was “wrong” about inflation when she said in 2021 that it was only a “small risk.”
Tuesday evening, Yellen told CNN’s Wolf Blitzer that her prediction was incorrect due to unpredictable shocks to the market that she didn’t fully understand.
“Well, look, I think I was wrong then about the path that inflation would take,” Yellen said after Blitzer played a clip of her misguided assessment of the economy. “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.”
Like President Joe Biden’s recent opinion column in The Wall Street Journal addressing inflation, Yellen shifted the primary responsibility 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.”
In the WSJ, Biden wrote, “First, the Federal Reserve has a primary responsibility to control inflation.”
“My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation,” he added. “I won’t do this. I have appointed highly qualified people from both parties to lead that institution. I agree with their assessment that fighting inflation is our top economic challenge right now.”
Nathan Brand, a GOP deputy communications director, blasted Yellen for her error in judgment.
“This clip is absolutely brutal. Joe Biden’s Treasury Secretary finally admits they were wrong about inflation… No kidding,” Brand tweeted. “Families are paying $500 more each month because of inflation.”
This clip is absolutely brutal.
Joe Biden’s Treasury Secretary finally admits they were wrong about inflation… No kidding.
Families are paying $500 more each month because of inflation. https://t.co/tBCmnct2hQ
— Nathan Brand (@NathanBrandWA) May 31, 2022
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.”
A report from the Joint Economic Committee Republicans said in March, when prices were generally lower than they are now, “that Americans in the Mountain region—Utah, Colorado, Arizona, New Mexico, Montana, Idaho, and Wyoming—are experiencing the highest inflation rates with over $500 in added household costs in January.”
Still, Yellen insisted on CNN that Biden understands “what an important and huge burden inflation is placing on American households.”