The Treasury secretary acknowledges that she was wrong about the “course that inflation would take”

US luxury goods sales surge 1:26 Washington (CNN) — US Treasury Secretary Janet Yellen admitted Tuesday that she failed to anticipate how long high inflation would affect consumers. American consumers, as the Biden administration works to contain a growing political drag.

“I think I was wrong then about the course inflation would take,” Yellen told CNN’s Wolf Blitzer on “The Situation Room” when asked about her 2021 comments that inflation only posed a “small risk.” The statement is the latest sign that the administration’s expectations of a normalizing economy have been derailed by the ongoing pandemic and war in Europe. “As I mentioned, there have been large, unforeseen shocks to the economy that have spiked food and energy prices and supply disruptions that have severely affected our economy and that I, at the time, did not fully understand, but now we recognize it,” he said. Yellen and other White House officials once portrayed inflation as a temporary side effect of the economy returning to normal after the pandemic, pointing to problems in supply chains as demand outstripped supply. However, months later, inflation is at the highest level in the last four decades. The latest economic indicators have sparked optimism that inflation hit a 40-year high in March, although economists warn it could be quite some time before inflation returns to healthy levels. In response, the White House will conduct a month-long response focused on the economy. The push began Monday with an op-ed by President Joe Biden in The Wall Street Journal and continued Tuesday with an Oval Office meeting between Biden, Federal Reserve Chairman Jerome Powell and Yellen. President Joe Biden, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen hold a meeting in the Oval Office. The Treasury secretary said that Biden had indicated at the meeting that he “shares the Fed’s priority of bringing down inflation, and that he strongly believes in supporting the Fed’s independence to take whatever action is necessary.” The Powell-led Fed has been criticized for being slow to tackle high inflation, end emergency aid to the economy and start raising interest rates. However, the Fed has vowed to raise interest rates quickly and earlier this month raised them by half a percentage point for the first time since 2000. The US central bank has signaled more aggressive rate hikes to come in the coming months. . In addition to Yellen, other economic advisers have flooded the media hoping to get the message across that Biden is focused on lowering gas, food and housing prices, which have caused his approval ratings to plummet. The president, Yellen said Tuesday, knows “the significant and enormous burden that inflation places on American households.” — Matt Egan contributed to this report.