Janet Yellen: Treasury Secretary says she sees no signs of recession in the US economy

CNN
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Treasury Secretary Janet Yellen said Thursday in an exclusive interview with CNN that she sees no sign of that recession In the near term, as the US economy rebounded from six months of deflation.

During a face-to-face interview in Ohio aired on CNN’s “Erin Burnett OutFront,” Yellen said third-quarter GDP data released Thursday underlined the strength of the US economy as policymakers urgently move to cool the rampant and spiraling inflation that has had Sharp impact on American views on the economy – and endangered the Democratic majority on Capitol Hill less than two weeks after the midterm elections.

“Look, what we’re seeing now is strong growth this quarter. Asked if the latest GDP data confirms any recession fears, Yellen said: ‘We are in a fully functioning economy. It is very normal for growth to slow down. It has lasted through the first three quarters of this year, but is still doing well. We have a very strong job market. I don’t see signs of stagnation in this economy at this point.”

Yellen’s optimism comes amid growing concern from economists and financial officials about the possibility of a recession sometime next year, but was based in part on elements of the latest data that showed signs of a necessary slowdown in key areas of the economy. The road to a “soft landing” as the Federal Reserve prepares to continue its rapid pace of rate hikes.

GDP – the broadest measure of economic activity – Increased 2.6% year-over-year during the third quarterAccording to preliminary estimates released Thursday by the Bureau of Economic Analysis. That’s a turnaround from a decline of 1.6% in the first quarter of the year and a negative 0.6% in the second.

But Yellen’s view also underscores the complex balancing act that President Joe Biden and his top economic officials have attempted over the course of this year, as they seek to highlight rapid economic recovery and major legislative victories while also pledging to tackle high prices.

“Inflation is very high — it is unacceptably high and Americans feel it every day,” Yellen said in response to a question about how the administration is arranging its view of the US economy as discontent grows among voters. Yellen acknowledged that it will take time for prices to fall back, saying that efforts to bring prices back to levels “people are accustomed to” will likely cover the “next two years.”

It’s a fact that has undermined management’s efforts to cash in on what officials consider a solid track record. Asked about the economy last week, Biden told reporters it was “strong as hell,” drawing criticism from Republicans.

But Yellen agreed with the president’s assessment that the economy remains strong, and stands out in comparison to the performance of other economies around the world.

“If you look around the world, you will find a lot of economies that are already suffering not only from high inflation but from very poor economic performance, and the United States stands out. We have unemployment at a 50-year low. … We saw in this morning’s report – spending continued Consumer spending and investment spending are growing. We have strong household finances, business finance, and well-capitalized banks.”

“This is not an economy in recession and we continue to do well,” she added.

Yellen also acknowledged frustration within the administration that efforts to pull the US economy out of crisis didn’t get what credit officials thought it deserved.

“There were many problems we would have had, and difficulties many American families would have,” Yellen said. “These are problems that we don’t have because of what the Biden administration did. So, one often doesn’t attribute problems that don’t exist,” he added.

Yellen traveled to Cleveland as part of a management campaign to highlight major legislative gains — and the tens of billions of dollars in private sector investment policy-driven toward industrialization across the country.

It’s an important part of an economic strategy designed to address the many vulnerabilities and failures exposed when the Covid-19 virus devastated the world, with significant federal investments in infrastructure and supporting — or creating from scratch — key parts of critical supply chains.

Listed as a series of major private sector investments, including the $20 billion Intel plant that opened just a few hours’ drive outside Columbus, Yellen said they were “real tangible investments that are happening now,” though she acknowledges that it will take time to become Fully effective.

Yellen pledged that these efforts will be felt as she runs through the economy in the coming months and years. Asked if the administration’s general message to Americans is patience, Yellen said: “Yes.”

“But you’re starting to see bridges that have been repaired pop up online — not in every community, but very soon. Many communities are going to see improved roads and bridges that are collapsing. We’re seeing money flow into research and development, which is really an important long-term source of strength for the American economy.” She said America would grow stronger and we would become a more competitive economy.

Yellen also addressed the battle lines drawn this week over raising the debt ceiling, Washington’s ongoing crisis of its own making and which House Republicans have once again vowed to leverage for leverage if they take the majority.

“The president and I agree that America should not be held hostage to members of Congress who believe it is okay to compromise the credit rating of the United States and threaten default on US Treasuries, which are the bedrock of global financial markets,” Yellen said. ..

But Yellen, who has long highlighted the “destructive” nature of the standoffs, has also advocated eliminating the debt limit altogether through legislation. A group of House Democrats wrote to Democratic leaders to request this measure in the lame-duck session of Congress, but Biden rejected the idea this week.

When Yellen was asked about the split, she said only that she and Biden agreed that “raising the debt ceiling is up to Congress.”

“It’s absolutely essential that it happens, and I’d like to see it happen the way it could,” Yellen added.

As management moves toward a period of time that traditionally results in senior officials leaving management, she’s made it clear that she doesn’t plan to be one of them. Asked about reports she told the White House she wanted to stay there next year, Yellen said it was an “accurate reading.”

“I’m so excited about the show we talked about,” Yellen said. “And I see it as a major boost to economic growth, tackling climate change, and strengthening American families. And I want to be a part of that.”