US Treasury Secretary Janet Yellen expressed confidence in the US Federal Reserve’s fight against inflation and said she sees no sign that the US economy is in a broad recession.
“We are likely to see some slowdown in job creation,” Yellen said on NBC’s “Meet the Press” on Sunday, according to Bloomberg. “I don’t think this is a recession. A recession is a broad weakness in the economy. We don’t see that right now.”
With inflation rising at its fastest pace in four decades, a growing number of analysts say it will take a recession and higher unemployment to significantly reduce price pressures. The Federal Reserve raised interest rates in June by the largest rate since 1994 and is expected to approve another 75 basis point increase this week.
Inflation is “very, very high,” Yellen said, noting that it is also high in many other advanced economies.
“The Fed is charged with implementing policies that will reduce inflation,” he said. “And I expect them to be successful.”
Even if the US records two consecutive quarters of economic contraction, Yellen – citing the US labor market – said she does not expect academics at the National Bureau of Economic Research who decide on recessions to speak of such a development.
“I would be surprised if the NBER declared this period a recession, even if it happens to have two quarters of negative growth,” he said. “We have a very strong labor market. When you’re creating almost 400,000 jobs a month, that’s not a recession.
Source: Capital
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