In an interview with WBUR's “Here and Now” on Thursday, Treasury Secretary Janet Yellen responded to a question about lessons learned for the future from the Biden administration, which inaccurately described inflation as temporary, saying, “Inflation is declining,” he said. I'm making a soft landing.
asked co-host Scott Tong. [relevant exchange begins around 7:20] “You acknowledged that the Biden administration and the Federal Reserve were wrong to suggest that inflation would be temporary and transitory. That was not the case, and businesses will extract value from failure. I still remember a business professor using this phrase, “You can learn from setbacks.'' What happened with inflation and what did you learn for future policy? ”
“Well, inflation. First of all, inflation has gone down. When you hear the word temporary, I think a lot of people imagine it's a matter of days or weeks,” Yellen said. And in our economy, it lasted more than a year. So I regret using the word temporary. But inflation has come down significantly. The labor market is functioning well. This is the first time in more than 50 years that the unemployment rate has been below 4% for 23 consecutive months. We can clearly see the situation and the inflation rate is down to 2%. So I have to say that there are very rare times when the inflation rate goes down and the economy doesn't go into recession, but we… has not experienced that situation. In that sense, I think this is a soft landing.”
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