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Janet Yellen admitted “I was wrong” when she said last year that inflation was a small, manageable risk.

“I think I was wrong then about the path that inflation would take,” she said, when shown clips of her downplaying inflation risks on CNN’s “The Situation Room”.

“There have been unanticipated and large shocks to the economy that have boosted energy and food prices, and supply bottlenecks that have affected our economy badly, that at the time I didn’t fully understand, but we recognize now,” she said in the interview with Wolf Blitzer.

Asked whether inflation would get worse, Yellen replied: “We can’t rule out further shocks.”

Though US inflation is showing signs of cooling, it is still running at levels not seen in four decades. Russia’s invasion of Ukraine and related Western sanctions have driven higher prices for food, gasoline, and key commodities. Restrictions to help combat COVID cases have helped cause supply-chain problems that have lifted the price of input goods for manufacturers such as carmakers.

“Inflation’s too high, and it’s got to be brought down,” she added.

In those comments, Yellen signaled she didn’t expect inflation to be a long-term problem, describing it as a small risk that was manageable. But she acknowledged events had proved the opposite.

“As a result of the current high levels of inflation, our fair value model points to further downside risk for valuations (~10%), especially if inflation does not subside quickly,” analysts wrote.