US Treasury Secretary Janet Yellen admitted she missed her forecast about inflation, after saying it only posed “a small risk” one year ago.
“I think I was wrong then about the path that inflation would take,” Yellen said to CNN’s Wolf Blitzer. “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 fully understand, but we recognize that now.”
Despite inflation may have peaked last March after sitting at 40-year highs, economists are warning that a return to healthy levels will take months.
After initially seeing inflation as a temporary side effect of the pandemic and the disruption of supply chains, now Yellen and other White House officials are concerned about how Russia’s invasion of Ukraine and recent covid outbreaks will further impact the global economy.
The White House is launching a month-long effort to signal a heavy focus on the economy. Yesterday President Joe Biden Yellen and Federal Reserve Chairman Jerome Powell discussed the new plan at the Oval Office.
The Central Bank has approved two rate hikes this year totaling 75 basis points. Officials have indicated that additional 50 basis point increases are coming over the next several meetings.