US Treasury Secretary Janet Yellen testified before a hearing in the House Ways and Means Committee on President Biden’s proposed US budget for 2023, on Capitol Hill in Washington, June 8, 2022.
Jonathan Ernst | Reuters
The recession that many Americans fear is coming is not “at all imminent,”[ads1]; Treasury Secretary Janet Yellen said Sunday.
The talk of a recession has accelerated this year as inflation remains high and the Federal Reserve is taking aggressive steps to counter it. On Wednesday, the Fed announced a 75 basis point rise in interest rates, the largest since 1994. Fed Chairman Jerome Powell also indicated the Federal Open Market Committee’s intention to continue its aggressive path with monetary policy tighteners to curb inflation.
At the same time, many expect the combination of robustness in consumption expenditure and job growth to keep the United States out of recession.
“I expect the economy to slow down,” Yellen said in an interview with ABCs.This week. “” It has grown very fast, as the economy, like the labor market, has recovered and we have reached full employment. It is natural now that we expect a transition to steady and stable growth, but I do not think a recession is inevitable at all. “
Although Yellen seemed optimistic about avoiding recession, the global economy continues to face serious threats in the coming months with the continuing war in Ukraine, soaring inflation and the Covid-19 pandemic. “It is clear that inflation is unacceptably high,” Yellen said.
Nevertheless, she does not believe that a fall in consumption will be the cause of a recession. Yellen told ABC News that the US labor market is the strongest in the post-war period and predicted that inflation would decline “in the months ahead”.