A US recession is “not inevitable,” Treasury Secretary Janet Yellen said Thursday, adding that she believes the world’s largest economy is on track to bring down inflation.
Her comments follow a vigorous campaign by the US Federal Reserve to cool demand this year, walking a tightrope between cutting consumer costs and trying not to plunge the economy into a downturn.
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Currently, many economists expect that the US could experience a downturn next year.
“Whether or not we can avoid a recession, I think the answer is yes,” she told reporters during a visit to the Bureau of Engraving and Printing’s currency facility in Fort Worth, Texas.
Supply chain bottlenecks are starting to ease and rents for new homes have “essentially peaked” with the labor market also cooling slightly, Yellen said.
“Without seeing significant net layoffs nationwide, I believe we are on track in terms of bringing down inflation and a recession is not inevitable,” she added. As companies scale back growth expectations and hiring plans, the number of people leaving their jobs has also decreased somewhat, she said.
Last week, Federal Reserve Chair Jerome Powell added that it was “very plausible” that the US would achieve a soft landing, referring to a scenario where unemployment rises but the economy avoids a severe recession .
On Thursday, Yellen said the United States had “listened very carefully” to allies, trying to understand their concerns about Washington’s push to push climate-friendly technologies in America.
“I think the goal of Congress was to make sure we have secure supply chains and try to get our allies involved in them,” she said.
Asked if she has any plans to visit China after President Joe Biden’s meeting with his Chinese counterpart Xi Jinping, Yellen said she didn’t have any concrete plans yet but was “surely open to it.”
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