In a recent exclusive interview with FOX Business, Treasury Secretary Janet Yellen admitted that her previous predictions about inflation were wrong. Yellen stated, “I regret saying it was transitory [inflation]. It has come down, but I think transitory means a few weeks or months to most people. And it’s lasted longer than that.”
This admission comes after Yellen had downplayed concerns about rising costs and inflationary pressures back in June 2021, referring to them as “transitory” factors. She had predicted inflation rates to hover around 3 percent for the rest of the year. However, just one year later, inflation surged to 9.1%, reaching levels not seen in four decades.
Recent Labor Department data revealed that inflation unexpectedly rose in February, primarily due to increased gasoline and rent prices. Year-over-year, inflation climbed to 3.2%. Yellen, in her interview, acknowledged the ongoing financial difficulties faced by the housing and rental markets.
Yellen emphasized that most forecasters believe inflation will eventually decrease. She identified housing costs as the main contributor to inflation and pointed out that rental prices for new apartments have actually declined or remained flat in many parts of the country.
While Yellen remains optimistic about inflation decreasing over time, her previous misjudgment raises concerns about her ability to accurately assess economic conditions. Critics argue that such miscalculations can have severe consequences for the American people, who are already grappling with rising prices and financial strain.
Overall, Yellen’s admission of her flawed predictions highlights the challenges faced by the Biden administration in managing the economy effectively. As inflation continues to impact American households, it is crucial for policymakers to accurately assess market conditions and implement appropriate measures to alleviate the burden on the American people.
