U.S. Treasury Secretary Janet Yellen says during a hearing of the U.S. House Financial Services Committee on the Annual Report of the Financial Stability Oversight Board at Capitol Hill in Washington, DC, USA , May 12, 2022. Saul Loeb / Pool via REUTERS
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WASHINGTON, May 31 (Reuters) – U.S. Treasury Secretary Janet Yellen said Tuesday that she had been wrong in the past about the path inflation would take, but said President Joe Biden’s top priority is to domesticate price rises and to support Federal Reserve actions to achieve this. that.
When asked in an interview with CNN if he had made a mistake in minimizing the threat posed by inflation in public statements last year, Yellen said: “I think I was wrong about the path that inflation would take. “.
“As I mentioned, there have been unexpected and big shocks to the economy that have raised energy prices and food and bottlenecks that have severely affected our economy which at the time I did not fully understand. “Yellen said, adding that the shocks. ranging from the Russian invasion of Ukraine to the recent blockades of COVID-19 in China.
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“So really, the shocks to the economy have continued, but inflation is the number one concern for President Biden,” Yellen said.
Biden “strongly believes and is in favor of the Fed’s independence to take the necessary steps” to reduce inflation, Yellen added.
Biden met with Fed Chairman Jerome Powell on Tuesday and stressed that he “respects the independence of the Federal Reserve,” a White House official said. Read more
Yellen said the Biden administration was taking steps to try to complement the Fed’s effort by reducing the cost of prescription drugs and health care and pushing proposals in Congress to boost the use of renewable energy.
While he said the recent decline in core inflation data was encouraging, he noted that oil prices remained high and that Europe was working on a plan to ban Russian oil imports.
“We can’t rule out more shocks,” Yellen said.
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Report by David Lawder and Costas Pitas; Edited by Leslie Adler
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