Janet Yellen, Who Said Record Inflation Would Be Transitory, Now Says It’ll Be Lower Next Year


U.S. Treasury Secretary Janet Yellen, who said in 2021 the current high levels of inflation in the American economy would be “transitory,” said Sunday she now believes inflation will be much lower by the end of the year.

In an interview with 60 Minutes, the economist said there is a risk of a recession next year.

“So I believe inflation will be lower,” said Yellen.

“I am very hopeful that the labor market will– remain quite healthy– so that people can feel good about their finances and their personal economic situation,” she said.

“I believe by the end of next year you will see much lower inflation. if there’s not– an unanticipated shock,” she said.

Yellen, who previously served as chair of the Federal Reserve from 2014 to 2018, has led the Treasury Department since President Joe Biden’s inauguration in 2021.

Under Biden and Yellen, the U.S. economy has experienced the highest levels of inflation in more than 40 years.

In October, the rate of inflation as gauged by the Consumer Price Index was 7.7 percent.

To put that into perspective, $100 in U.S. dollars held in October 2022 has the same buying power as $87.78 would have when Biden entered office.

Put differently, a savings account that had $500,000 cash sitting in it on Inauguration Day now has the buying power of just $438,878.30. (You can run the numbers yourself with the Bureau of Labor Statistics’ Consumer Price Index Inflation Calculator.)

The Federal Reserve, which claims to pursue the dual mandate of ensuring maximum employment and the stability of prices, decided in 2012 that the ideal rate of inflation in the U.S. economy is 2 percent.

The rate of inflation cracked that level in April 2021 and has increased steadily since.

The rising rate of inflation follows on the heels of unprecedented federal spending in response to the COVID-19 pandemic.

Spending on programs intended to mitigate the harm of the pandemic skyrocketed the federal debt and increased the M2 money supply from $15.3 trillion in Feb. 2020 to an all time high of more than $22 trillion in April 2022.

Because inflation devalues the savings of anyone holding U.S. dollars, it functions like a hidden tax, allowing the government to appropriate the buying power of Americans and direct it as Congress sees fit.

The hidden tax of inflation not only punishes savers, but works regressively to pilfer the wealth of the poorest Americans. Poorer Americans tend to save in U.S. dollars rather than in hard assets, which are less vulnerable to inflation’s erosive power.


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