US Treasury Secretary Janet Yellen: “Inflation is unacceptably high” | Abroad

She argues that the high inflation is caused by global factors, including Ukraine, not by local factors. US inflation is currently at its highest level in more than 40 years. This undermines the purchasing power of households, which in turn is damaging to the economy. Yellen does think that inflation in the US could fall in the coming months.

The Federal Reserve, the US central bank umbrella, raised interest rates at the highest rate in nearly thirty years last week to counteract high inflation. Yellen, who is herself a former Fed chairman, expects economic growth in the US to weaken, but does not think a recession is imminent. “I don’t think a recession is inevitable,” said Yellen, who expects the economy to slow down and then see “slow and stable growth.” She went on to say that the US job market is very strong.

“Chairman Jerome Powell has said his intention is to lower inflation while maintaining a strong labor market. That takes talent and luck, but I think it’s possible,” Yellen said of her successor at the Federal Reserve.

The US economy already contracted 1.5 percent of GDP in the first quarter. The start of the second quarter seems to indicate that the slowdown in growth is continuing in sectors such as manufacturing, real estate and retail.

According to a poll by the Conference Board institute, 76 percent of 750 employers surveyed believe a recession is imminent, or in fact already underway. However, Yellen believes that this scenario can still be averted, thanks in particular to consumer spending, which remains “very strong” despite high inflation.