Treasury Secretary Janet Yellen acknowledged that the stimulus spending under President Biden, particularly the $1.9 trillion Covid relief bill, may have contributed “a little bit” to rising inflation in the U.S. However, she attributed the primary cause of inflation to pandemic-related supply chain issues, which led to significant shortages and price increases. In an exit interview, Yellen highlighted the necessity of that spending, noting the urgent pandemic situation when Biden took office, which included high mortality rates and unemployment. She defended the administration’s focus on deficit reduction despite critics pointing to escalating U.S. deficits, stating that discretionary spending remains historically low. Yellen expressed skepticism regarding former President Trump’s proposed “Department of Government Efficiency,” questioning its viability given popular mandatory spending programs, such as Social Security and Medicare. As her tenure comes to an end, Yellen endorsed Scott Bessent as her successor, citing his market experience as advantageous for the role. Looking ahead, Yellen plans to take a vacation and anticipates returning to the Brookings Institution for writing and reflection on her experiences over the past four years.
