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President Joe Biden’s $1.9 trillion American Rescue Plan did contribute to inflation, Treasury Secretary Janet Yellen conceded on Wednesday.
Speaking in an interview with Matt Murray, editor-in-chief of The Wall Street Journal, the former head of the Federal Reserve admitted that the White House’s enormous spending had played a role in today’s inflationary environment, adding that it was “justified” due to the various economic risks.
“So, look, inflation is a matter of demand and supply, and the spending that was undertaken in the American Rescue Plan did feed demand,” she said.
She added that today’s 40-year high inflation was an unintended consequence of the Biden administration attempting to avoid a sharp economic downturn and facilitate full employment.