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Yellen Admits She Was Wrong on Inflation Last Year

She points to slowing growth in the core inflation rate as indicating that price hikes are moderating. Still, in this geopolitical climate, “we can’t rule out further shocks.”

By Christopher Condon | June 03, 2022 at 11:24 PM
Janet Yellen Photographer: Greg Nash/The Hill/Bloomberg

Treasury Secretary Janet Yellen gave her most direct admission yet that she erred last year in predicting that elevated inflation wouldn’t pose a continuing problem.

“I was wrong about the path inflation would take,” Yellen said in an interview that aired Tuesday on CNN. “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 at the time I didn’t fully understand.”

New variants of Covid, lockdowns in China, and Russia’s war on Ukraine have all imposed shocks on the economy, the Treasury chief said after attending a meeting at the White House with President Joe Biden and Federal Reserve Chair Jerome Powell to address inflation.

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