U.S. Treasury Secretary Janet Yellen testifies before a State Ways and Means Committee hearing on the 2023 U.S. budget proposed by President Biden, on Capitol Hill in Washington, June 8, 2022 .
Jonathan Ernst | Reuters
Treasury Secretary Janet Yellen said Sunday that the recession many Americans fear will not happen.
Talk of a recession has intensified this year as inflation remains high and the Federal Reserve takes aggressive steps to combat it. On Wednesday, the Fed announced a 75 basis point rate hike, the biggest increase since 1994. Fed Chairman Jerome Powell also said the Federal Open Market Committee’s intention was to continue on its way. tighten monetary policy actively to curb inflation.
At the same time, many people expect the combination of resilience in consumer spending and job growth to keep America out of recession.
“I predict the economy will slow down,” Yellen said in an interview with ABC’s.This week. “” It is growing at a very fast rate, as the economy, as well as the labor market, has recovered and we have reached full employment. It is natural that we now expect a transition to steady and steady growth, but I don’t think a recession is inevitable. “
Although Yellen seems optimistic about avoiding a recession, the global economy is still facing serious threats in the coming months with the continuing war in Ukraine, soaring inflation and the Covid-19 pandemic- 19. “Clearly, inflation is unacceptably high,” Yellen said.
However, she does not believe that the drop in consumer spending will lead to an economic downturn. Yellen told ABC News that the US labor market was strongest in the post-war period and predicted that inflation would slow “in the coming months.”
