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Update (1315ET): Just as we predicted – but even sooner than we expected – Treasury Secretary Janet Yellen has not just walked back her earlier statement but has entirely reversed it.

What time does the Treasury pull a Philip Lane and explain that what Yellen said is not what she said

— zerohedge (@zerohedge) May 4, 2021

Speaking at The Wall Street Journal’s CEO Council Summit, the former Fed head said she “didn’t see [Biden’s] rescue package overheating the economy.”

“Let me be clear it’s not something I’m predicting or recommending,” Yellen says about rates, flip-flopping her earlier perspective entirely.

Then she addressed the issue of inflation, toeing the establishment line that it will be “transitory” for the next six months or so…

She added that if there is an inflation problem she is certain the Federal Reserve can be counted on to address it.

We wonder who tapped her on the shoulder and said “stay in your lane, Janet!”

*  *  *

Treasury Secretary Janet Yellen is speaking at The Atlantic’s “Future Economy Summit” this morning – a speech she pre-recorded yesterday – and has sparked some chaos with her comments.

The highlight was this…

“It may be that interest rates will have to rise a little bit to make sure our economy doesn’t overheat”

And this didn’t help…

“We’ve gone for way too long letting long-term problems fester in our economy”

Is she talking about Fed-sponsored wealth-creation widening the inequality gap?

Watch her remarks here…

And the response – stocks puked as one would expect at the first signs of the punchbowl being taken away…

The dollar also spiked on the comment…

We wonder what Jay Powell will have to say about Janet stepping on his toes? Did she just start the process of thinking about thinking about thinking about normalization?