Yellen tells senators U.S. is facing 'unacceptable levels of inflation'

Treasury Secretary Janet Yellen told a group of senators Tuesday the U.S. is facing "unacceptable levels of inflation."

In her testimony before the Senate Finance Committee, she also pushed back against Republicans senators who argued that record-level inflation now in the U.S. is entirely the fault of President Biden and his administration's policy. 

"We're seeing high inflation in almost all of the developed countries around the world," she said in response to the argument that the problem is Biden over-stimulated the economy last year by signing into law the pandemic-related $1.9 trillion American Rescue Plan.

The federal government's Consumer Price Index, a good indicator of U.S. inflation, increased in March by 8.5%, compared to 12 months earlier, marking the highest annualized increase in 40 years. 

Yellen believes the problem is mostly the result of continuing supply chain issues and uneven supply and demand curves, including excessive demand for goods, not services, during the pandemic.

In addition, she cited "supply side disturbances to oil and food markets resulting from Russia’s war in Ukraine."

She also said fixing inflation is Biden's top priority and that parts of his of proposed social and climate legislation could help offset consumer costs for some goods.

Last week, Yellen said she had been "wrong" last year when predicted that rising inflation would be transitory and not a long term problem. She will face similar questions Wednesday before the House Ways and Means Committee.