Biden administration admits inflation no longer ‘transitory’

Treasury Secretary Janet Yellen Tuesday admitted that inflation is not transitory as she had said, nor was it ever. 

“Well, look, I think I was wrong then about the path that inflation would take,” the Treasury secretary said in an interview with CNN’s Wolf Blitzer. “As I mentioned, 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 I didn’t — at the time didn’t fully understand. But we recognize that now.” 

“The Federal Reserve is taking the steps that it needs to take. It’s up to them to decide what to do. And, for our part, President Biden is focused on supplementing what the Fed does with actions we can take to lower the cost that Americans face for important expenditures they have in their budgets,” she added. 

In a Tuesday hearing before Congress, Yellen said she and Federal Reserve Chairman Jerome Powell “could have used a better term than transitory,” adding that she expects inflation to remain high. 

“There’s no question that we have huge inflation pressures, that inflation is really our top economic problem at this point and that it’s critical that we address it,” she remarked, per The Guardian. “I do expect inflation to remain high, although I very much hope that it will be coming down now.” 

A year ago, Yellen assured the country that inflation was transitory and urged Biden – along with all G7 countries – to keep spending even after economic recovery. She testified before Congress that inflation was merely “transitory”, a trope echoed by many mainstream media outlets who helped push through Biden’s $1.9 trillion spending bill in March 2021. 

“Republicans are invoking the threat of inflation to attack President Joe Biden’s spending plans,” cried Bloomberg in March 2021. 

“Why big-spending Biden can shrug off GOP warnings of inflation,” read a headline from Politico in April 2021 claiming that “years can go by before soaring inflation ever takes hold — and Biden will probably be gone from the White House if the country finds out that his critics were right.” 

“The Inflation Scare Doesn’t Match Reality,” claimed Forbes in May 2021. 

“Why Inflation Fears Over Biden’s Stimulus Package May Be Misplaced,” suggested Business Insider, dismissing warnings from economists that Biden’s spending would cause record-high inflation. 

“Why the Fed doesn’t fear Biden’s $1.9 trillion bill,” said Reuters Graphics. 

The Washington Post published a particularly supportive piece of Yellen and her inflation remarks in June 2021, titled “Yellen carefully navigates inflation test, challenging skeptics one more time.” In addition to raving about Yellen’s stamp collection, the article claimed the secretary was “charged with navigating the Biden administration through a vexing inflation test and besieged by rivals in the Capitol and on Wall Street who are counting on her to stumble.”