Janet Yellen: I Was Wrong About Inflation

Last year, Treasury Secretary Janet Yellen said that inflation posed just a "small risk" to Americans. Now, she's admitting she didn't get that quite right. "I think I was wrong then about the path that inflation would take," Yellen told CNN Tuesday when Wolf Blitzer asked her about her 2021 prediction. Inflation is now, of course, at a more than 40-year high. "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," Yellen said. A spokesperson later pointed to Russia's invasion of Ukraine, ongoing COVID variants extending the pandemic, and lockdowns in China as some of those shocks.

Yellen said President Biden, who published an op-ed on his plan for fighting inflation in the Wall Street Journal Monday, "shares the Fed's priority in lowering inflation, and that he believes strongly in his support of the independence of the Fed to take the steps that are necessary." Biden met with Federal Reserve Chair Jerome Powell Tuesday. Fox Business says Yellen has been "downplaying" inflation in other statements over the past months. (More Janet Yellen stories.)