US Treasury Secretary admits he was wrong about inflation
US Treasury Secretary Janet Yellen – Photo: REUTERS
When asked in a May 31 interview with Radio CNN whether she was wrong to downplay the threat posed by inflationary In statements over the past year or so, Yellen admitted: “I think I was wrong at the time in the direction that inflation was going.”
In a number of statements in 2021, Ms. Yellen once said that inflation is only a “small risk”.
“As I mentioned, there have been major and unforeseen shocks to the economy that have raised energy and food prices as well as supply bottlenecks that have adversely affected our economy, which I didn’t fully understand it at the time,” Yellen explained.
According to the US Treasury Secretary, shocks to the world’s largest economy continue and the risk of new shocks in the context of oil prices is still very high and Europe has just announced its oil sanctions. Russia.
“But inflation is the number one concern for President Biden,” Yellen said, adding that recent data shows that inflation in the US has begun to decline.
In a meeting with US Federal Reserve Chairman Jerome Powell and Ms. Yellen on May 31, Mr. Biden supported the FED’s fight against inflation and called for respect for the agency’s independence after the Fed’s actions. The Fed’s attitude caused many concerns to cause the US economy to decline.
“Let’s start with a simple proposition: respect the Fed, respect the Fed’s independence,” Biden said.
On May 4, the FED announced the biggest interest rate hike since 2000 with an increase of half a percentage point, to curb soaring US inflation. Even so, the agency remains confident that the US economy is strong enough to withstand a rate hike without falling into a recession.
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