Treasury Janet Yellen U.S. economy doing well amid global uncertainty

US Treasury Secretary Janet Yellen during an armchair discussion at the Rotman School of Management in Toronto, Ontario, Canada on Monday, June 20, 2022.

Cole Burston | Bloomberg | Getty Images

Treasury Secretary Janet Yellen said on Tuesday that the US economy was “doing very well” as rising energy prices, Covid-19 outbreaks and Russia’s war with Ukraine have gripped global markets.

“From a United States perspective, I think the United States is doing very well,” Yellen told CNBC’s Sara Eisen on Tuesday. The Treasury Secretary meets world financial leaders this week at the annual meetings of the International Monetary Fund and World Bank in Washington, DC

Also Read :  What’s behind the energy spat between Canada, Mexico and the US? | International Trade News

She said the economy was expected to slow after a very strong recovery, but a recent jobs report released last week showed a “very resilient” economy. The Bureau of Labor Statistics reported Friday that nonfarm payrolls rose by 263,000 in September, while the unemployment rate fell to 3.5%, the lowest since late 1969.

However, consumers have been somewhat constrained by prices rising almost as fast as they have in more than 40 years. The New York Fed’s latest Consumer Expectations Survey shows consumers expect a 5.4% year-on-year inflation rate, the lowest figure in a year and down from 5.75% in August.

This level peaked at 6.8% in June and has since fallen as the central bank initiated a series of rate hikes totaling 3 percentage points. Markets are largely expecting the Fed to continue raising rates until it brings inflation down to its long-term target of 2%.

Also Read :  Crisis-stricken Cuba caught between ally Russia, nearby U.S.

Yellen acknowledged that inflation is too high and that bringing it down is a priority for the Biden administration. But she said there is a way to do it while maintaining a healthy labor market.

“Even with interest rates rising, companies have a debt burden that’s broadly manageable,” Yellen said. She added that US financial markets continue to function well and the Treasury Department sees no signs of deleveraging, which generally occurs in an environment of tightening monetary policy.

Also Read :  Hynes claims record NRL Dally M Medal haul

Yellen also said that OPEC+’s decision to cut oil production and Russia’s ongoing war against Ukraine have also impacted liquidity in markets, but there are no signs of serious concern. Concerns about US dollar strength are also a natural consequence of the different pace of monetary tightening in the US and other countries, she said.

“The dollar is a safe haven, so in uncertain times we see capital inflows into our safe markets,” Yellen said. “And all of these things are pushing the dollar higher against a variety of countries.”

— CNBC’s Jeff Cox contributed to this report.


Leave a Reply

Your email address will not be published.