Yellen says the Fed can lower inflation without causing a recession

Washington US Treasury Secretary Janet Yellen said she believes the Fed can bring down inflation without causing a recession due to the strength of the labor market, the US household balance sheet, the low cost of debt, and the strength of the banking sector.

Yellen told a House Financial Services Committee hearing on Thursday that “all of these things indicate that the Fed has a path to lower inflation without causing a recession, and I know it would be their goal to try to do that.”

He added during the hearing on the work of the Financial Stability Oversight Board, that inflation is the “number one economic problem” facing the country and the government of President Joe Biden.

“It has a significant negative impact on many vulnerable households as we focus on tackling inflation,” Yellen said, emphasizing government initiatives to keep gasoline prices low through large releases of oil from the strategic reserve and efforts to overcome congestion in the country. ports.

Yellen ignored several attempts by Republican lawmakers to try to persuade her to blame high inflation for the relief spending package. Corona virus disease-19 from the $1.9 trillion Biden administration last year.

He said several factors are driving up inflation, including increases in energy prices due to the Russian invasion of Ukraine and ongoing supply chain problems caused by the pandemic. He added that other countries are also experiencing high inflation.

“It shows that there are factors beyond US spending that are critical to inflation,” he said.

Data on Thursday showed that the US labor market remained tight while producer price inflation began to slow, rising 0.5% in April compared to 1.6% in March, the Labor Department said.