Janet Yellen says economic recovery depends on supply chain, green agenda and end of Ukraine war
As the Federal Reserve raises interest rates to the highest level since the 2008 financial crisis, the White House is trying to find a way to fight inflation without sending the country into a full-scale recession.
“I think there is a way through this,” Treasury Secretary Janet Yellen told the Atlantic on Thursday. “I think of a full-scale recession as a period where there is too much unemployment. You don̵[ads1]7;t have a strong labor market. We have one of the tightest labor markets right now.”
Yellen predicts that inflation will finally be under control next year.
“There are risks. The Russian invasion of Ukraine has not come to an end. We see Putin weaponizing oil and gas,” Yellen said. “We will remain vulnerable to supply shocks.”
YELLEN SAYS FED CAN TAME INFLATION WITHOUT CRUSHING THE LABOR MARKET
Yellen is keeping an eye on where Russian oil reserves will be distributed on the global market as the US tries to strengthen its energy capacity.
“Russia is now very actively looking to find places to sell its oil. They are giving huge discounts to China and India, which were two big buyers,” Yellen said.
When it comes to building a clean energy future, Beijing remains an obstacle, despite the bipartisan CHIPS Act spurring more confidence in domestic semiconductor manufacturing.
“It’s rare earths, solar panels, battery, electric battery components that we’re really too dependent on China for,” Yellen said.
To create a smooth transition to clean energy, Yellen says the United States must ensure that “communities that depend and have depended on fossil fuels are not left behind.”
Biden has appropriated a record $360 billion in the Inflation Reduction Act for climate change measures. The White House must now present a green energy transition to the entire nation.
FEDERAL RESERVE RAISES INTEREST RATES BY 75 BASIS POINTS FOR THIRD STRAIGHT MONTH
“This is important because I really think having, especially the coast, enjoy rapid growth has contributed to polarization in the country,” Yellen said. “Obviously, with rising house prices in these areas, they don’t have it easy.”
Over the past year, mortgage rates have doubled, and the 30-year fixed-rate mortgage is above 6% for the first time since 2008.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
According to a new Fox News poll, 78% of voters say inflation has caused economic hardship. 59 percent of voters are also “extremely” worried about inflation and higher prices.
As the Federal Reserve warns that Americans will have to endure a rise in unemployment and higher interest rates, it is a waiting game before consumers will be able to feel financial relief.