Treasury Secretary Janet Yellen says she made a mistake last year in predicting that inflation would be minimal or manageable.
“I think I was wrong then about the path that inflation would take,” Ms. Yellen told CNN on Tuesday.
A once-promising fight against COVID-19 took a downward turn in mid-2021 as variants surged and producers struggled to shake off the pandemic and meet the demand for products.
People who saved money or received federal payments continued to spend on goods instead of services, trips, conferences and other events, exacerbating the problem.
Republicans say President Biden overheated the economy by authorizing new stimulus funding alongside the vaccine-driven recovery phase of the pandemic. They also say he should have listened to economists like Larry Summers, who warned that inflation was going to be a big problem.
“There have been unanticipated and large shocks to the economy that boosted energy and food prices and supply bottlenecks that have affected our economy badly that I at the time didn’t fully understand,” Ms. Yellen told CNN.
Mr. Biden has tried to pin part of the blame on Russian President Vladimir Putin, saying the invasion of Ukraine caused a spike in gas prices and shocks to the food supply.