Biden’s Treasury Secretary Admits She Was Wrong About Inflation Being ‘Small Risk’

During an interview with CNN’s Wolf Blitzer on Tuesday, Treasury Secretary Janet Yellen admitted that she was “wrong” about inflation when she said in 2021 that it was just a “small risk.”

The Treasury Secretary said that her prediction was incorrect due to shocks in the economy that she was unable to predict and that she didn’t “fully understand.”

“Well, look, I think I was wrong then about the path that inflation would take,” Yellen said. “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.”

In March 2021, Yellen had said that she believed there was only “a small risk” of inflation and added, “I think it’s manageable.” And in May 2021, Yellen again said, “I don’t anticipate that inflation is going to be a problem.”

Yellen’s March 2021 comments came as the inflation crisis was just beginning. Since then, inflation has continued to soar to its highest rate in 40 years. Due to the record high inflation, the real wages of American workers have fallen during Biden’s presidency. According to a report from the Bureau of Labor Statistics, the “Real average hourly earnings decreased 2.6 percent, seasonally adjusted, from April 2021 to April 2022. The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 3.4-percent decrease in real average weekly earnings over this period.”

A March 2022 report from Bloomberg found that 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.”

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