Inflation is currently running at 3.6% annually, according to the core personal consumption expenditures index, the Federal Reserve’s preferred inflation measure. The reading has held at a 30-year high for four consecutive months. The Federal Reserve typically targets 2% inflation when setting economic policy.
"Supply bottlenecks have developed that have caused inflation," Yellen, who served as Fed chair under former Presidents Barack Obama and Donald Trump, told CNBC on Oct. 5. "I believe that they’re transitory, but that doesn’t mean they’ll go away over the next several months."
That represented a sharp U-turn from Yellen’s previous comments on inflation.
In June, Yellen said inflation could hit 3%, but that pricing pressures would be "transitory."
The Treasury Department did not respond to FOX Business’ request for comment.
Yellen on Friday once again attempted to tackle the inflation elephant, suggesting that President Biden’s proposed $1.75 trillion spending package would drive down inflation if it were to be passed by Congress.
"What this package will do is lower some of the most important costs, what they pay for health care, for child care," Yellen told CNBC in a separate interview on Friday. "It’s anti-inflationary."
Not everyone is on board with the idea that government involvement in those areas will reduce costs.
"Government subsidies have always led to higher prices," said Stephen Moore, a senior fellow at FreedomWorks who served as an economic adviser to Trump. He pointed to surging college tuitions and health care costs as evidence.
Moore said there was "no question" that passing Biden’s human infrastructure plan would "greatly exacerbate inflation" and make the costs of child care and health care rise.