U.S. Treasury Secretary Janet Yellen faces a gauntlet of tough questions about how the Biden administration has handled the economy in Congress this week, after admitting she was "wrong" about the path inflation would take.

Yellen testifies to the Senate Finance Committee Tuesday and the House of Representatives Ways and Means Committee on Wednesday, thrusting one of the most experienced, yet least political of Joe Biden's advisers into the hot seat as Republicans hammer the president over inflation that has reached 40-year highs.

As Treasury secretary, Yellen, 75, was a key voice predicting price rises would be "transitory" through 2021 even as some analysts and investors warned the U.S. economy could overheat. As Fed chair, she was criticized in 2017 for the opposite, cooling the economy to fight inflation that never came.

Congressional Republicans plan to grill Yellen on her faulty forecast, and the role the $1.9 trillion Biden-backed American Rescue Plan had in driving up prices, aides tell Reuters. They would also like to hear her abandon Biden's bedrock plan to raise taxes on U.S. companies and seek more federal funding that would fuel further inflation, Representative Kevin Brady, the top Republican on the Ways and Means Committee, told reporters.

Unanticipated large shocks including Russia's military operation in Ukraine and recent COVID-19 lockdowns in China have exacerbated the tightness in supply that has pushed up energy and goods prices in unexpected ways, Yellen and the White House argue. The "unprecedented" injection of financial assistance also contributed about 3 percentage points to inflation by the fourth quarter of 2021, the San Francisco Federal Reserve Bank estimates.

While Yellen publicly retired the term "transitory" in December, she continued to reassure White House officials privately early this year that price pressures would likely ease in 2022, said one person involved in the talks.

Frustration is high in the White House over a gulf between the strength of the U.S. economy's recovery from coronavirus shutdowns, with a strong labor market and record company profits, and Biden's low poll numbers.

While Yellen has no plans and is under no pressure to retire, conversations about who may replace her have percolated through the administration in recent months, with Commerce Secretary Gina Raimondo and former White House COVID-19 coordinator Jeff Zients topping the list of possible successors.

(With input from Reuters)