Yellen says she regrets saying inflation was ‘transitory’

Treasury Secretary Janet Yellen said she regrets describing 2021’s inflation as “temporary.” The term was used by several Federal Reserve and Biden administration officials to describe the pandemic-induced price increases, which they initially thought were temporary.

“I’m sorry that I said it was temporary. It’s gone down. But I think for most people, temporary means weeks or months,” Yellen said Monday on FOX Business. He said this in an interview with the network’s Edward Lawrence.

Treasury spokesman Christopher Hayden said in an email to The Hill that this is not the first time Yellen has expressed regret for calling inflation “temporary,” and previously said: He also spoke at a press conference at the Ministry of Finance. interview with WBUR in January.

Headline inflation fell to 3.2% year over year in February from a peak of 9.1% in June 2022, a significant improvement but still above the Fed’s mandate to limit price increases to 2% a year. There is.

Fed Chair Jerome Powell and the central bank, who initially came under fire for saying inflation was temporary, raised interest rates from near zero to 5.25% to 5.5% in March 2022 in an attempt to curb inflation by cooling demand. % range.

A year ago, many economists feared that raising interest rates would push the economy into recession, but now the U.S. economy is facing a rare “soft landing” (the slowing of the economy enough to lower high interest rates). It seems that the term is starting to become more common. You can raise prices without causing a recession.

While the runway for a soft landing may be a little bumpy, with inflation proving firmer than usual, former Fed Chair Yellen was optimistic about the overall downward trend in price pressures.

“I don’t expect this to be smooth month-to-month, but the trend is clearly positive,” Yellen said.

Updated at 4:42 p.m.