Status: 06/01/2022 04:24 am
US Treasury Secretary Yellen has acknowledged errors in her earlier assessments given high inflation in the US. She underestimated the economic shocks caused by factors such as high energy prices and international supply chain problems.
US Treasury Secretary Janet Yellen has admitted that she was wrong in her assessment of rising inflation in the US. “I think I was wrong at the time about the development of inflation,” Yellen told US broadcaster CNN.
She underestimated the unforeseen and major shocks to the economy that have pushed up energy and food prices, and global supply chain shortages. The US economy is struggling with the consequences of Russia’s invasion of Ukraine and the recent corona outbreaks in China.
Biden declares war on inflation
US President Joe Biden has declared the fight against the high inflation of 8.3 percent to be his top domestic priority. In view of the rapidly rising prices, the US Federal Reserve recently took the largest interest rate step in 22 years and raised the key interest rate by half a point to the new range of 0.75 to 1.0 percent.
Fed Chair Jerome Powell has signaled increases of the same magnitude for the June and July meetings. Biden has assured Powell in the face of high inflation that his administration will not interfere in Fed monetary policy.