'I was wrong' on path of US inflation last year, says Treasury head Yellen

By Aysu Bicer

ANKARA (AA) – As price hikes take a growing bite out of Americans’ wallets, the US treasury secretary has conceded that last year she was wrong about “the path inflation that would take."

"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 at the time I didn’t fully understand," Janet Yellen admitted in an interview aired by CNN on Tuesday.

US inflation in March climbed to its highest level in more than 40 years, with an annual rate of 8.5%.

In recent weeks some Fed officials also said inflation in the country is comparable to levels seen in 1974 and 1983.

In 1974 the Fed kept interest rates relatively low in the face of rising inflation, but kept them relatively high against falling inflation, James Bullard, head of the St. Louis Federal Reserve, told an online Bank of Japan Institute for Monetary and Economic Studies conference.

"The contrast between the 1974 and 1983 experiences convinced many that it was important to 'get ahead' of inflation," he added.

After saying several times last year that the rise in prices is expected to be temporary, US Federal Reserve Chair Jerome Powell has been criticized as being too slow to fight inflation.

On Tuesday, US President Joe Biden met Tuesday with Fed Chair Jerome Powell at the White House to discuss record inflation.

Biden reiterated that his top priority is "addressing inflation," saying it begins with respecting the Fed and its independence.

He also promised not to interfere with the Fed’s work to bring down inflation.

Powell and other members of the Fed are “laser focused on addressing inflation, like I am," Biden said, adding that the central bank's monetary policy will "address the crisis for the American people."

National Economic Council Director Brian Deese and Treasury Secretary Janet Yellen, who preceded Powell as Fed chair, also attended the meeting.

During the meeting Yellen pointed to the economy's good performance in other respects, especially employment, but added she didn’t expect the same pace of big job gains to continue.