Treasury Secretary Said Inflation Risk Was "Small" and "Manageable." Three Months Later It Hit a 40-Year High.

When you've been Federal Reserve Chair AND become Treasury Secretary, people tend to trust your inflation calls. Janet Yellen had the credentials. The gravitas. The Nobel-adjacent credibility. So when she dismissed inflation fears as "small" and "manageable" in early 2021, markets exhaled. The $1.9 trillion American Rescue Plan passed. The Fed kept rates near zero. Then reality happened. By June 2022, inflation hit 9.1% — the highest since 1981. Gas prices doubled. Grocery bills exploded. The Fed scrambled into the most aggressive rate-hiking cycle in decades. To her credit, Yellen eventually admitted "I was wrong" on CNN — a rare act of honesty from an economic policymaker. But for millions of Americans watching their purchasing power evaporate, the mea culpa came about $5,000 per household too late.