Treasury Secretary Janet Yellen says US recession not 'inevitable'

Edited By: Vyomica Berry
Washington Updated: Jun 19, 2022, 09:23 PM(IST)

US Treasury Secretary Janet Yellen testifies before the Senate Finance Committee on the US President's proposed budget request for fiscal year 2023, on Capitol Hill in Washington, DC, June 7, 2022. Photograph:( AFP )

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Attributing it partly to the war in Ukraine, she said she did not believe that 'a dropoff in consumer spending is the likely cause of a recession'
 

Just days after the US Federal Reserve hiked interest rates, Treasury Secretary Janet Yellen said on Sunday (June 19) that recession in the United States is not "inevitable."

Raising fears of an economic contraction, Yellen conceded that "clearly inflation is unacceptably high."

Attributing it partly to the war in Ukraine, she said she did not believe that "a dropoff in consumer spending is the likely cause of a recession."

Predicting that the pace of inflation would slow in coming months, Yellen argued that the US labor market is "arguably the strongest of the postwar period."

Soaring inflation and supply-chain snarls exacerbated by the war in Ukraine have increased pessimism after the US economy has recovered strongly from the damage wrought by Covid-19. 

According to Yellen, President Joe Biden was reviewing some tariffs imposed on China by former President Donald Trump that made "no strategic sense."

After the US central bank on Wednesday raised the benchmark borrowing rate by 0.75 percentage points, Wall Street stocks tumbled.

With people beginning to hold off on vacation plans, economists see worrying signs that consumer confidence is weakening.

Adobe Analytics reported people are beginning to hold off on vacation plans domestic flight bookings were down 2.3 percent last month.

(With inputs from agencies)

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