Treasury Secretary Janet Yellen mentioned Thursday the U.S. financial system is in a state of transition, now not recession, regardless of two consecutive quarters of damaging expansion.
Recession, Yellen insisted, is a “broad-based weakening of our financial system” that comes with considerable layoffs, industry closures, lines in family funds and a slowdown in non-public sector task.
“That isn’t what we’re seeing at this time,” she mentioned all over
Those feedback, although, got here at the identical day that the Commerce Department’s Bureau of Economic Analysis reported that gross home product, the broadest measure of financial task,
Coming at the heels of a 1.6% contraction within the first quarter, the 2 immediately declines meet
Yellen began her remarks with a listing of the management’s financial accomplishments, together with nonfarm payroll expansion of greater than 9 million.
But inflation has confirmed the larger impediment,
Yellen said the weight that upper costs elevate and mentioned the management is “laser-focused” on addressing the location.
“We’ve entered a brand new section in our restoration serious about attaining secure, solid expansion with out sacrificing the positive factors of the ultimate 18 months,” she mentioned. “We know there are demanding situations forward people. Growth is slowing globally. Inflation stays unacceptably top, and it is this management’s best precedence to deliver it down.”
President Joe Biden and Yellen each touted the chances of
Yellen famous that whilst the Federal Reserve, which she chaired from 2014-18, has “the principle position in bringing down inflation, the president and I are dedicated to taking motion do pressure down prices and give protection to Americans from the worldwide pressures we are facing.”
The Fed has raised charges 4 instances this yr, for a complete of two.25 proportion issues, and most likely will upload extra will increase later within the yr.
Yellen attributed emerging inflation to the struggle in Ukraine, provide chain issues and the Covid pandemic. She didn’t speak about the affect that financial and financial stimulus had on worth pressures.
Source Link: https://www.cnbc.com/2022/07/28/yellen-says-the-economy-is-not-in-a-recession-despite-gdp-slump.html