U.S. Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee hearing on President Biden’s proposed U.S. budget for 2023, on Capitol Hill, Washington, June 8, 2022.
Jonathan Ernst | Reuters
Treasury Secretary Janet Yellen said Sunday that the recession that many Americans fear is not “at all imminent.”
Talk of a recession has accelerated this year as inflation remains high and the Federal Reserve takes firm steps to confront it. On Wednesday, the Federal Reserve announced a 75 basis point interest rate hike, its largest since 1994. Federal Reserve Chairman Jerome Powell also indicated the FOMC’s intention to continue its aggressive course of monetary policy tightening in order to rein in inflation. .
“I expect the economy to slow,” Yellen said in an ABC interview.this week“It is growing at a very fast rate, the economy and the labor market have recovered and we have reached full employment. It’s natural now that we expect a transition to steady, stable growth, but I don’t think a recession is ever inevitable.”
Although Yellen sounded optimistic about avoiding a recession, the global economy still faces serious threats in the coming months with the ongoing war in Ukraine, high inflation and the COVID-19 pandemic. “It is clear that inflation is unacceptably high,” Yellen said.
However, she does not believe that the decline in consumer spending will be the cause of the recession. Yellen told ABC News that the US labor market is the strongest in the postwar period and predicted inflation would slow “in the coming months.”
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