US Treasury Secretary Janet Yellen said the United States is unlikely to experience a recession, despite very high inflation.
“There is nothing to suggest that the work is in recession,” she said in an interview at the New York Times Economic Forum.
The US economy has recovered strongly from the damage of Covid-19, but the highest inflation in 40 years and the roar of the supply chain exacerbated by Russia’s invasion of Ukraine have heightened pessimism.
The U.S. Department of Labor plans to release a May Consumer Price Index (CPI) report on Friday, and analysts expect the data to show a gradual slowdown at a blazing pace of 8.3% per annum. increase.
The Federal Reserve has begun to aggressively raise interest rates, and it is expected to raise rates significantly next week as policy makers are trying to combat inflationary pressures without causing a recession.
Yellen expressed confidence that they would succeed.
“I think there is a way to do this with a soft landing,” she said.
However, the Fed’s planned agility has increased the risk of a recession, commonly defined as negative growth for the second consecutive quarter.
In the forum, Yellen was asked to reply to rapper Cardi B’s tweet about the possibility of a recession.
“Is there a risk of a recession? Of course, there is a risk of a recession,” the Treasury Secretary said. “But is that likely? I don’t think so.”
When asked if he knew who Cardi B was, Yellen said, “I don’t have much time for her, but I’m alive.”
Federal Reserve Chairman Jerome Powell and President Joe Biden are each trying to mitigate concerns about a recession, and Powell said the US economy is strong enough to survive higher borrowing costs.