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Yellen admits inflation too high, still blaming Putin while insisting recession not ‘inevitable’

June 19, 2022 | | Print Article

Treasury Secretary Janet Yellen appears to be as delusional about the economy as President Joe Biden.

Recall that last week the president refused to accept blame for inflation, denied that a recession is inevitable, and claimed the economy is booming.

Speaking on ABC News this Sunday, Yellen offered some of the same dubious talking points when asked to respond to news that 44 percent of economists expect a recession to break out within the next year.

“Well, I expect the economy to slow. It’s been growing at a very rapid rate as the the labor market has recovered and we have reached full employment. It’s natural now that we expect to transition to steady and stable growth. But I don’t think recession is at all inevitable,” she said.

“Clearly inflation is unacceptably high. It’s President Biden’s top priority to bring it down and Chair Powell has said that his goal is to bring inflation down while maintaining a strong labor market. That’s going to take skill and luck, but, I believe it’s possible. I don’t think a recession is inevitable.”

Critics pounced by questioning the idea that the economy has “been growing” and that a recession isn’t inevitable.

Look:

Slightly later in the interview, ABC News host George Stephanopolous pointed out how both she and the president had been “too optimistic about inflation last year.”

Recall that both said inflation would be “transitory.” They both were clearly wrong.

Yellen replied by playing the blame game.

“Well, inflation is really unacceptably high. Part of the reason is Russia’s war on Ukraine has boosted energy and food prices in the United States and globally. It’s important to recognize that the United States is certainly not the only advanced economy suffering from high inflation. We see it in the UK, we see it in France, Germany, Italy, and the causes of it are global, not local,” she said.

“Supply chain snarls partly resulting from lockdowns in China are also boosting inflation. And so, these factors are unlikely to diminish immediately, but over time I certainly expect inflation to come down, and I think it’s possible to have that happen in the context of a strong labor market maintaining …”

Not once did she cite any of the Biden administration policies that have also factored into America’s high energy/food prices and supply chain dilemmas.

These policies include banning the importing of Russian oil, shutting down pipelines,  and instituting burdensome oil/gas regulations.

When pressed by Stephanopolous about when inflation will finally start to decline, Yellen offered a non-answer answer while playing more of the blame game.

“Well, we have had high inflation in first half of this year and that locks in high inflation really for the entire year, but I do expect in the months ahead that the pace of inflation — it’s likely to come down, although remember there are so many uncertainties relating to global developments and we’re united with our allies in certainly wanting to take the steps necessary to address, to, you know, punish Russia for what it’s doing in Ukraine and there are some spillovers to us as well,” she said.

In other words, inflation should come down, but that pesky Russia might get in the way.

Stephanopolous then asked Yellen why, if inflation is a global problem, the United States’ inflation is higher than that of Europe. Yellen responding with a diatribe about “spillover.”

“So, you know, energy prices spillover is really half of inflation, food and energy, and there are spillovers because energy is an important input into almost everything in the economy. It is true that we’ve had corn inflation over and above that — that is too high and the Fed will take steps to bring it down and President Biden believes there are other things the administration can do to support what the Fed will do,” she said.

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Vivek Saxena
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