Treasury Secretary Janet Yellen admitted that soaring U.S. inflation was “unacceptable” and then said the U.S. economy would be in even worse shape were it not for the very Biden administration’s spending that is blamed for the price hike.
Speaking to AFP, Yellen said of the rise in the cost of living, which reached 7.5% last month: “Inflation is clearly a major concern for Americans and it really needs to be tackled.
“Of course, staying at the current level is unacceptable.”
Her words were in stark contrast to those of Joe Biden, who repeatedly insisted that rising inflation was “elevated” and temporary.
Treasury Secretary Janet Yellen admitted that soaring inflation is “unacceptable” but insists the economy would be in even worse shape were it not for Joe Biden’s lavish spending.
Yellen, who is America’s first female treasury secretary, said she was confident the Federal Reserve would come to the rescue after the cost of living rose by the most since February 1982 last month.
She said: “I am confident that the Fed … (will) deploy its toolbox in the proper way to keep the recovery on track and also deal with the excess pressure that we have that is causing inflation.”
The “toolkit” Yellen is talking about will almost certainly include higher interest rates, which will curb consumer spending and cool the economy.
But these increases will lead to higher mortgage and loan payments, hurting millions of ordinary Americans.
They are also likely to reduce demand for goods and services and could spell doom for firms still on the brink of bankruptcy in the wake of the COVID pandemic.
The Labor Department announced last week that inflation hit a 40-year high of 7.5 percent.
Despite the gloomy economic news, Yellen insisted that Biden’s lavish spending actually protected Americans from bigger economic problems.
Critics say that Biden’s $1.9 trillion stimulus package was a waste and that it exacerbated inflation by sharply increasing the money supply, thus lowering the value of the currency in circulation.
Yellen said, “President Biden has been working with Congress to implement the American bailout plan to protect households and businesses from these adverse effects.”
She said she believes inflation will ease as COVID recedes and the associated bottlenecks in the supply chain disappear. Yellen added that “getting the US economy back on track” will require more government assistance.
Biden has insisted that the rise in inflation is temporary, but he faces defeat in the November midterm elections if he does not see it improve America’s current economic peril.
The president is currently suffering from historically low approval ratings and is well aware that he must improve the economy in time for this November’s midterm elections to try to avoid losing control of both the Senate and the House of Representatives.
A recent poll showed that more Americans – 59 percent – are concerned about the economy than any other issue, with inflation coming in second, along with voting rights, among 55 percent of voters polled.
But the finance minister has warned of more clouds on the horizon as tensions linger between Russia, Ukraine and the latter’s allies, with Vladimir Putin in charge of much of the gas supplies to mainland Europe.
“We are concerned about the possible impact on energy markets, given the importance of Russia’s role as a supplier of oil to the world market and natural gas to Europe,” she said.
Yellen said she understands that any economic sanctions imposed on Russia would have “global implications” if it decides to attack Ukraine.