Economy
US Treasury Secretary on inflation: “I was wrong then”
US Treasury Secretary Janet Yellen answers questions from journalists at a G7 conference on Petersberg near Bonn. Photo: Federico Gambarini/dpa
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High energy costs and international supply chain problems: Janet Yellen now admits that she made mistakes in her assessment of rising consumer prices over the past year.
US Treasury Secretary Janet Yellen has acknowledged errors in her earlier assessments given high inflation in the US. “I think I was wrong at the time about the course of inflation,” Yellen told US broadcaster CNN.
She had underestimated the shocks to the economy from factors such as high energy prices and international supply chain problems. Yellen said in May last year that she did not expect inflation to become a problem. In April, consumer prices rose by 8.3 percent compared to the same month last year.
US President Joe Biden stressed on Tuesday at a meeting with Yellen and Federal Reserve (Fed) Chairman Jerome Powell that the fight against inflation is his top priority. He also pledged that he would continue to respect the Fed’s independence. Powell is also concentrating on fighting inflation, just like himself. The central bank is already fighting the high inflation rate with a tighter monetary policy.
The US Senate confirmed Powell for another term as Fed chair by a large majority almost three weeks ago. The Democrat Biden had already nominated the 69-year-old for four more years in November. Powell has headed the central bank of the world’s largest economy since February 2018. The then President Donald Trump, a Republican, had nominated him. Powell has been a member of the Federal Reserve Board since 2012.