Treasury Sec. Janet Yellen insisted that despite rising prices on everyday items, inflation will not reach the levels that evoked chaos throughout the 1970s.
Yellen claimed that the difference between that era and now is that Americans trust the government to deal with the problem.
'In the 1970s, a series of supply shocks became a longer run problem ... that partly occurred because policy makers weren't trusted by the public to deal effectively with inflation,' Yellen told CNN.
'But I certainly see no evidence that that's the case now,' the Treasury Secretary added.
Yellen, who chaired the Fed from 2014 to 2018, said that the Federal Reserve has learned lessons from history.
Soaring inflation is hitting consumers in the wallet, with new data released this week showing the categories where prices are rising the fastest including groceries, gas and other key staples.
Overall inflation hit 5.4 percent in September from a year ago, matching the 13-year high hit in June and July, according to data released last month by the Labor Department.
Supply chain chaos, a labor shortage, and the Federal Reserve's easy money policies have all contributed to driving up prices, and if the current rate holds, the purchasing power of a dollar will be slashed in half in a little more than 13 years.
'In the 1970s, a series of supply shocks became a longer run problem ... that partly occurred because policy makers weren't trusted by the public to deal effectively with inflation,' Yellen told CNN
Some have called to mind the 'stagflation' crisis that plagued the country 50 years ago, meanwhile the Biden administration continues to insist inflation is transitory, brought on by the reopening of the economy as the nation is still reeling from the coronavirus pandemic.
Stagflation refers to a phenomenon of slow economic growth, fast-rising prices and high
