On the eve of a week that many experts see as a crucial point for the economy, Treasury Secretary Janet Yellen said that while “the economy is slowing down,” “this is not an economy that’s in recession,” adding, however, that “inflation is way too high.”
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“This morning I joined @MeetThePress to discuss the resilience of our economy, and the work this Administration continues to do to bring down costs for American families,” Yellen tweeted on July 24.
Speaking on NBC, Yellen said that “we’re in a period of transition in which growth is slowing and that’s necessary and appropriate and we need to be growing at a steady and sustainable pace. So there is a slowdown and businesses can see that and that’s appropriate, given that people now have jobs and we have a strong labor market,” according to the transcript of her remarks on the White House website.
Yellen’s comments come just a few days before the Federal Reserve is set to raise its rates once again — a move triggering recession fears — as well as on a week in which many economic reports are set to be released, including the second-quarter gross domestic product (GDP), preferred personal consumption expenditures (PCE) inflation data, the Conference Board’s consumer confidence index as well as the University of Michigan consumer sentiment report.
Yellen explained that the technical and actual definition of a recession considers “a broad range of data,” saying “this is not an economy that’s in recession.”
“But you don’t see any of the signs now — a recession is a broad-based contraction that affects many sectors of the economy–we just don’t have that. Consumer spending remains solid. It’s continuing to grow. Output, industrial output has grown in five of the six most recent months. Credit quality remains very strong. household balance sheets are generally in good shape,” she added.
Earlier this month and one day after the Consumer Price Index (CPI) data showed that inflation was worse than expected in June, Yellen said that “inflation in the United States remains unacceptably high and it’s our administration’s top economic priority to bring it down.”
Speaking in Bali, Indonesia, ahead of the Group of 20 finance ministers’ meeting, Yellen added that the greatest challenge today comes from Russia’s war against Ukraine, which is triggering “negative spillover effects from that war in every corner of the world – particularly with respect to higher energy prices and rising food insecurity,” according to a transcript of her speech, as GOBankingRates previously reported.
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