US Treasury Secretary Janet Yellen said on Sunday that a recession is not “inevitablein the United States, a few days after a new increase in the key rates of the American central bank which raises fears of the prospect of an economic contraction. “I don’t think a recession is inevitable“, said Janet Yellen on the ABC News channel, conceding however to expect “until the economy slows down” in the context of a transition to a “slow and stable growth“.
The hypothesis of a recession in the United States is gaining momentum after the historic decision on Wednesday by the central bank (Fed) to raise its key rates sharply, in an attempt to curb galloping inflation. “(Fed) Chairman Powell has said his goal is to reduce inflation while maintaining a strong job market. It will take skill and luck, but I believe it is possible.said the Treasury Secretary, calling the level of inflation “unacceptable“. “It is President Biden’s priority to reduce it“said Janet Yellen.
The US economy has already slowed with a 1.5% contraction in GDP in the first quarter, and the start of the second quarter seems to show that the slowdown is continuing in certain sectors such as manufacturing, real estate and retail sales. A survey by the Conference Board institute recently revealed that 76% of the 750 bosses questioned considered either that a recession was looming on the horizon, or that it was already in effect.
But the Treasury Secretary sees reason to hope that a recession does not materialize, especially with consumer spending remaining “very strong“, according to her. “It is clear that most consumers – even lower income households – continue to have savings that can serve as a buffer and will allow them to continue spending“supported Janet Yellen on ABC News.