U.S. recession is not ‘inevitable,’ however inflation is ‘unacceptably excessive,’ Treasury Secretary Yellen says
U.S. Treasury Secretary Janet Yellen testifies earlier than a Home Methods and Means Committee listening to on President Biden’s proposed 2023 U.S. funds, on Capitol Hill in Washington, June 8, 2022.
Jonathan Ernst | Reuters
The recession that many Individuals concern is coming isn’t “in any respect imminent,” Treasury Secretary Janet Yellen mentioned Sunday.
Speak of a recession has accelerated this 12 months 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 as a way to rein in inflation.
On the identical time, many count on the mix of resilience in shopper spending and job progress to maintain the U.S. out of recession.
“I count on the economic system to sluggish,” Yellen mentioned in an interview with ABC’s “This Week.” “It has been rising at a really speedy price, because the economic system, because the labor market, has recovered and now we have reached full employment. It is pure now that we count on a transition to regular and steady progress, however I do not assume a recession is in any respect inevitable.”
Though Yellen appeared optimistic about avoiding recession, the worldwide economic system remains to be dealing with severe threats within the coming months with the continued struggle in Ukraine, hovering inflation and the Covid-19 pandemic. “Clearly, inflation is unacceptably excessive,” Yellen mentioned.
Nonetheless, she would not consider a drop-off in shopper spending could be the reason for a recession. Yellen advised ABC Information that the U.S. labor market is the strongest of the post-war interval and predicted that inflation would sluggish “within the months forward.”
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