US Treasury Secretary: ‘I Was Wrong About Inflation’ in 2021

The American Treasury Secretary Janet Yellen. 

Source: A video screenshot, Youtube/Credit Suisse

As America’s inflation rate remains at a level unreported since the 1980s, decreasing the population’s purchasing power, the US Treasury Secretary Janet Yellen has admitted to being wrong about “the path inflation would take.”

In reference to 2021 and her actions that year, the Secretary said in an interview with CNN, that:

“I think I was wrong then about the path that inflation would take. As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices.” 

Admitting her mistaken assumption that last year’s eruption of inflation would be transitory, Yellen also said that the US has also been struggling against supply bottlenecks which “have affected our economy badly” and that she “didn’t fully understand” their nature before they started to take their toll on America’s economic performance.

In many countries across the world, over the past years, rising inflation has boosted the demand for cryptoassets. The latest available data from the US Bureau of Labor Statistics indicates that, for the year ended April 2022, America’s inflation rate stood at 8.3%. 

“Over that period, prices for food at home increased 10.8%, the largest 12-month percentage increase since the period ending November 1980,” according to the bureau. Prices for food away from home increased 7.2% in that period, which they said is the largest over-the-year percentage increase since an 8% increase in November 1981.

Earlier this week, Yellen met with President Joe Biden, the Federal Reserve (Fed) Chairman Jerome Powell, and the National Economic Council Director Brian Deese to discuss the necessary measures to tackle the country’s surging inflation.

“The Federal Reserve is taking the steps that it needs to take. It’s up to them to decide what to do,” the Secretary said. 

She argued that 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.”

The Secretary’s admission didn’t escape the Cryptoverse’s watchful eye. 

Anthony Pompliano, the founder of Pomp Investments, tweeted that Yellen “has finally capitulated and said she was wrong on inflation,” but also that “more of this” is needed in the country’s leaders, arguing that: 

If we’re going to give appointed officials a hard time, we must also respect when they are willing to admit they are wrong publicly.

Sven Henrich, the founder of the trading and analysis website NorthmanTrader, seems to disagree, however. He argues that Yellen is blaming “unexpected factors” — which he calls “a cop out as so many of us here pointed out repeatedly last year that they were wrong.”

Henrich is calling for consequences for these massive mistakes, stating:

So I keep asking: Where is the accountability and the consequences for the people that made such a gross misjudgment?

And why did they insist on flooding the system with ungodly liquidity both fiscal & monetary?

I repeatedly called it reckless last year.

They HURT the people they were supposed to protect, the poor and the middle class got hurt by the very inflation they were wrong about.

— Sven Henrich (@NorthmanTrader) June 1, 2022