U.S. Treasury Secretary Janet Yellen testifies earlier than a House Ways and Means Committee listening to on President Biden’s proposed 2023 U.S. price range, on Capitol Hill in Washington, June 8, 2022.
Jonathan Ernst | Reuters
The recession that many Americans worry is coming shouldn’t be “at all imminent,” Treasury Secretary Janet Yellen stated Sunday.
Talk of a recession has accelerated this yr as inflation stays excessive and the Federal Reserve takes aggressive steps to counter it. On Wednesday, the Fed introduced a 75 foundation level rate of interest hike, its largest since 1994. Fed Chair Jerome Powell additionally indicated the Federal Open Market Committee’s intent to proceed its aggressive path of financial coverage tightening to be able to rein in inflation.
At the identical time, many count on the mixture of resilience in consumer spending and job development to maintain the U.S. out of recession.
“I expect the economy to slow,” Yellen stated in an interview with ABC’s “This Week.” “It’s been growing at a very rapid rate, as the economy, as the labor market, has recovered and we have reached full employment. It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”
Although Yellen appeared optimistic about avoiding recession, the worldwide financial system remains to be going through severe threats within the coming months with the continued warfare in Ukraine, hovering inflation and the Covid-19 pandemic. “Clearly, inflation is unacceptably high,” Yellen stated.
Still, she would not consider a drop-off in shopper spending could be the reason for a recession. Yellen advised ABC News that the U.S. labor market is the strongest of the post-war interval and predicted that inflation would sluggish “in the months ahead.”
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