Yellen said last year, before the US lost control of inflation, “I don’t think we’re about to lose control of inflation.”
Janet Yellen, secretary of the Treasury, stated on Sunday that she anticipates “much lower inflation” within the next year. Since joining the Biden administration, the appointee to the Cabinet, however, has been consistently and unjustifiably optimistic about inflation.
In a Sunday appearance on 60 Minutes, Yellen stated, “I believe that by the end of next year, inflation will be much lower, barring any unanticipated shocks.” The secretary cited reduced shipping costs and delivery times as evidence that high prices will soon be a thing of the past.
Yellen made the same forecast last year when inflation was a worrisome 5.4%. Yellen stated in October 2021, “I don’t believe we’re about to lose control of inflation,” implying that the resolution of supply chain issues would tame inflation within a year. However, by June 2022, inflation had reached a 40-year high of 9.1 percent.
In May 2021, less than two months after Congress passed the $1.9 trillion American Rescue Plan, Yellen predicted there would be no inflation because President Joe Biden’s spending plans were “relatively small in relation to the size of the economy,” an argument that aligned her with administration officials. However, economists have concluded that the American Rescue Plan contributed significantly to inflation.
In June, Yellen apologized for her inaccurate forecasts, admitting she “was wrong… about the path inflation would take.”
Similar to Obama, Biden was unable to accurately predict inflation rates. In July 2021, the president stated that “no serious economist” predicts unchecked inflation in the future.