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Yellen says she was wrong to underestimate inflation risks in the past.
"As I mentioned, there were unexpected and major shocks to the economy that boosted energy and food prices and supply bottlenecks that affected our economy severely, which I didn't fully understand at the time," she said, adding that the shocks include the Russian invasion of Ukraine and the recent anti-Covid-19 lockdowns in China.
"Indeed, the shocks to the economy have continued, but inflation is President Biden's number one concern," Yellen said.
She added that Biden "strongly believes and supports the independence of the Federal Reserve to take the necessary steps" to reduce inflation.
A White House official said Biden met earlier on Tuesday with Federal Reserve Chairman Jerome Powell and confirmed that he "respects the board's independence."
Yellen said the Biden administration is taking measures to try to complement the Federal Reserve's efforts by lowering the cost of prescription drugs and health care and by supporting proposals in Congress to promote the use of renewable energy.
She stated that the recent decline in core inflation data was encouraging, but indicated that oil prices remained high and that Europe was working on a plan to ban Russian oil imports.
"We cannot rule out more shocks," Yellen said.
WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen said on Tuesday she had been wrong in the past about predicting the path inflation would take, but said taming rising prices was President Joe Biden's top priority, and that he supported Federal Reserve action to do so.
Asked in an interview with CNN whether she had been wrong to downplay the threat of inflation in public data over the past year, Yellen said, "I think I was wrong at the time about the course inflation would take."