U.S. recession isn’t ‘inevitable,’ but inflation is ‘unacceptably high,’ Treasury Secretary Yellen says

Janet Yellen, U.S. Treasury secretary, testifies in front of a House Ways and Means Committee Hearing on the President Biden’s 2023 U.S. Budget, Capitol Hill, Washington, June 8, 2022.
Jonathan Ernst | Reuters

Janet Yellen, Treasury Secretary said on Sunday that the recession Americans fear coming is not imminent.

As inflation continues to rise, talk of a recession is intensifying this year. The Federal Reserve aggressively counters it. The Fed’s Wednesday announcement of a 75-basis point increase in the interest rate was its biggest since 1994. Jerome Powell, Fed Chair, also stated that the Federal Open Market Committee intends to keep its aggressive policy of tightening monetary policy to control inflation.

Many people also expect the mixture of resilience in consumer spending job growth to keep the U.S. out of recession.

“I expect that the economy will slow,” Yellen stated in an interview on ABC’s “The View from ABC.”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. While it is natural to expect steady, stable growth now, I do not believe a recession will be inevitable.

Even though Yellen was optimistic that the economy would avoid recession, global economic stability is in serious danger due to the war in Ukraine, soaring inflation, and the Covid-19 pandemic. Yellen declared that “Clearly, inflation has reached an unacceptable level.”

However, she believes that a fall in consumer spending won’t be the main cause of recession. Yellen stated that the U.S. labor force is stronger than any other post-war period, and that she expects that inflation will slow in the coming months.

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