Yellen defends Biden's economic record and discusses the possibility of slower inflation.

• Yellen, the Treasury Secretary, defended the Biden administration's economic accomplishments and expressed hope that inflation would be near 2% by the end of 2022.
• In American history, the most significant decrease in unemployment has occurred, as Yellen stated.
• Yellen concurred with President Biden's remarks, supporting the Fed's anticipated plan to adjust monetary policy with an inflation rate of 7%.

Janet Yellen, the Treasury Secretary, on Thursday defended the Biden administration's economic accomplishments in the first year and expressed hope that inflation would be near 2% by the end of 2022.

Over the past year, the U.S. labor market experienced significant growth, with the addition of more than 6 million jobs and an unemployment rate below 4%.

"A year ago, unemployment was extremely high and the Federal Reserve was facing similar challenges. We were all concerned about a potential repeat of the 2008 financial crisis, which took nearly a decade to recover from," Yellen stated.

The Treasury secretary stated on CNBC's "Closing Bell" that the significant decrease in American unemployment in a year should be viewed as a remarkable achievement.

The White House and the Treasury secretary are pleased with the strong employment situation in the U.S., as employers added a record 6.4 million jobs in 2021 and the unemployment rate remains under 4%, according to the latest Labor Department data.

As the head of the Department of the Treasury under President Joe Biden, Yellen focused on aligning White House economic policy and distributing Covid-19 relief funds to American consumers and businesses throughout 2021.

Yellen acknowledged that the economic landscape is not ideal and pain inflation is affecting households that have not experienced proportional wage gains.

If we can control the pandemic, I anticipate inflation decreasing and returning to normal levels of around 2% by the end of the year.

In recent months, she and other administration advisors have tried to address public concerns about the sharp increase in prices due to supply-chain disruptions and high demand for goods. The Labor Department reported in January that prices rose 7% in December compared to the previous year, which is the fastest rate of inflation since 1982.

On Wednesday, Yellen echoed Biden's comments about the need for the Federal Reserve and Chairman Powell to adjust monetary policy to control inflation, which is currently above 2%. The Fed has the authority to raise interest rates to combat inflation across the economy.

For months, Powell and other Fed officials have hinted that the world's most influential central bank will soon raise borrowing costs. Although the exact timing of the first increase is uncertain, Wall Street predicts a 90% chance of a quarter-point rate hike in March.

Yellen recommended a second term for Powell to the president, as she has frequently commended him for his contributions in guiding the Fed in bolstering the economy amid the pandemic.

Recently, Yellen has defended the Biden administration's effort to pass a comprehensive climate change, child care, and worker-focused legislation called the Build Back Better plan. Despite this, Republicans remain steadfast in their opposition to the bill, arguing that it will exacerbate the current inflation crisis.

The progress of the Build Back Better legislation has been halted due to opposition from centrist Democrats, including Sens. Joe Manchin and Kyrsten Sinema, who have raised concerns about the bill's size, scope, and potential impact on prices.

The Biden administration, led by Yellen, has refuted those concerns and demonstrated that the existing infrastructure bill and the Build Back Better plan will tackle supply chain problems and high inflation.