Janet Yellen warned of an economic downturn.
Janet Yellen, in charge of the US Treasury, has said that the economy is still at risk of a recession and is worried about how high inflation has stayed.
She said it’s “appropriate and normal” for growth to be modest in an interview with the CBS show Face the Nation over the weekend.
When asked about a possible recession after the June jobs report, which was the weakest since December 2020 and showed that the US economy added fewer jobs than in previous months, Yellen said, “It’s not completely off the table.”
The Labour Department showed last week that the US economy added 209,000 jobs in June. The unemployment number went from 3.7% in May to 3.6% in June, a slight drop.
The finance secretary said that inflation has started to slow down, but it is still high because prices rose 4% year-over-year in May, double the US Federal Reserve’s 2% goal.
“We have a healthy economy, a great labour market, inflation too high and a concern of ours and the American people, but coming down over time,” Yellen said.
The Federal Reserve has been trying to stop inflation for months by raising interest rates to their highest level in decades, slowing down the economy and making people worry about a recession.
The central bank chose not to raise interest rates further last month, but it hinted that more rate hikes could happen this year. Last week, it said that a recession is “quite likely” in 2023, but it probably won’t be “deep” or “long.”