Treasury Secretary Yellen Admits Inflation ‘Unacceptably High’ as Rate Breaks 40-Year Record

Averaging 1.23 percent in 2020, and climbing to 5.4 percent by July of 2021, the US inflation rate began to surge from October 2021 onward, reaching over 7.5 percent in January 2022, and climbing to 9.1 percent in June. President Joe Biden has suggested that the problem is the result of “Putin’s price hike,” but economists say otherwise.

The US inflation rate “remains unacceptably high,” and it is the Biden administration’s “top priority” to “bring it down,” Treasury Secretary Janet Yellen has said.

“We’re first and foremost supportive of the [Federal Reserve’s] efforts – what they see, deemed to be necessary to get inflation under control. And beyond that, we’re taking our own steps that we believe will be supportive in the short term to get inflation down, particularly what we’re doing on energy prices, the Strategic Petroleum Reserve. Also, the work that we’re doing to institute a price cap on Russian oil to avoid potential future spikes in oil prices,” Yellen said at a press conference in Nusa Dua, Indonesia on Thursday at a meeting of G20 finance ministers.

Parroting President Biden’s claim that inflation was a “spillover effect” of “Putin’s war” in Ukraine, Yellen urged a deepening of US economic ties with G20 nations (apart from Russia) to “make our economies and our supply chains stronger and more resilient and avoid the sort of costly disruptions that have driven up inflation in America and globally.”

The US Consumer Price Index rose by 1.3 percent in June for an annual inflation rate of 9.1 percent, according to Department of Labor statistics released Wednesday. That is the sharpest increase since 1981, at the height of America’s ‘malaise days’ stagflationary crisis of raging inflation, low growth, and soaring energy costs.

The Federal Reserve hiked the interest rate to 1.5 percent in June, and financial experts predict that that it could increase to 3.4 percent by the end of 2022 as the Fed tries to get inflation under control. Last month, Peter Schiff, the economist who predicted the 2008 financial crisis, suggested that the only way to really get a handle on inflation would be to raise the rate to the same double digit figures it was at in the early 1980s. However, doing so would likely wipe out the US housing market and plunge the US into a steep recession, he said.

President Biden, Janet Yellen and other officials in Washington have repeatedly blamed the inflationary crisis on Vladimir Putin. However, economists have pointed to other, more important factors, including broken supply chains, rising demand, and the pumping of trillions of new dollars into the economy via the emergency Covid spending of 2020-2021 spending (which facilitated the largest upward transfer of wealth in history).