Treasury Secretary Janet Yellen said she is “feeling very good” about the U.S. making a soft economic landing without a recession.
“I am feeling very good about that prediction,” Yellen told Bloomberg when asked whether the U.S. would avoid a recession while still containing inflation. “I think you’d have to say we’re on a path that looks exactly like that.”
While inflation has dropped since its peak of 9.1 percent last June, it ticked up for the first time this year in July at 3.2 percent. This was the first increase after 13 months of falling inflation, but that does not mean high inflation rates will come back.
The Federal Reserve Board is weighing whether it should raise interest rates again at its meeting later this month in an effort for inflation to return to its 2-percent target.
“Every measure of inflation is on the road down,” Yellen said.
She also said some indicators in the labor market, like the jobless rate rising to 3.8 percent and labor force participation rate rising 0.2 percent, is “important and a good thing.”
Yellen gave the interview while heading back from attending the Group of 20 summit in New Delhi, which she said “remains the premier forum for global cooperation.” She attended the meeting alongside President Biden. Notably absent from the gathering: Chinese President Xi Jinping.
She also said that China has the ability to adjust its economic policies if it chooses to do so.
“I think they have quite a bit of policy space if they decide that it’s necessary to use it,” Yellen said. “They’ve made what to me seem like relatively small adjustments in monetary policy.”
Yellen has previously said she doesn’t expect a recession in the U.S. despite slow economic growth in China.
“Many countries do depend on strong Chinese growth to promote growth in their own economies, particularly countries in Asia — and slow growth in China can have some negative spillovers for the United States,” Yellen told Bloomberg Television in an interview in July.
“[U.S. economic] growth has slowed, but our labor market continues to be quite strong — I don’t expect a recession,” Yellen added.
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