CNN
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Treasury Secretary Janet Yellen said in an exclusive interview with CNN on Thursday that she does not see any signs of a recession in the near term as the US economy recovers from a six-month contraction.
In a one-on-one interview broadcast on CNN’s “Erin Burnett OutFront” program in Ohio, Yellen said the third-quarter GDP data released Thursday underlined the strength of the U.S. economy as policymakers took urgent action to curb the rampant and skyrocketing inflation. It had a sharp impact on American economic views, putting the Democratic majority on Capitol Hill in jeopardy, less than two weeks before the midterm elections.
“Look, what we’re seeing right now is solid growth this quarter. “After a very rapid recovery from high unemployment, growth has clearly slowed.” “We are in a full employment economy. It’s natural for growth to slow down. And the first three quarters of this year are over, but it continues to be good. We have a very strong labor market. At this point, I don’t see any signs of a recession in this economy.”
Yellen’s optimism came amid growing concerns from economists and financial officials that a recession is likely at some point in the next year, but was based in part on elements of the latest data showing signs that a necessary slowdown in key areas of the economy is leaving it open. The “soft landing” path as the Federal Reserve prepares to resume its rapid rate increase.
Gross domestic product, the broadest measure of economic activity, rose 2.6% year-on-year in the third quarter, according to preliminary estimates released Thursday by the Bureau of Economic Analysis. This is a return from the 1.6% decline in the first quarter and 0.6% in the second quarter.
But Yellen’s view also highlighted the complex balancing act that President Joe Biden and top economic officials have attempted throughout this year, while highlighting a rapid economic recovery and major legislative victories, while also pledging to tackle rising prices.
“Inflation is very high – unacceptably high, and Americans feel it every day,” he said. Yellen acknowledged that it will take time for prices to pull back, saying that efforts to bring prices down to levels “people are more used to” will likely take “the next few years”.
It’s a fact that undermines management’s efforts to capitalize on what officials see as a solid record. Asked about the economy last week, Biden told reporters he was “strong as hell” and drew criticism from Republicans.
However, Yellen agrees with the President’s assessment that the economy remains strong and stands out compared to how other economies around the world are performing.
“If you look around the world, there are many economies that are really suffering not only from high inflation but also from very poor economic performance, and the United States stands out. Our unemployment is at its lowest level in 50 years. … We saw in this morning’s report – consumer spending and investment spending continued to rise. We have solid household finance, business finance and well-capitalized banks,” he said.
“This is not an economy in recession and we continue to do well.”
Yellen also acknowledged that efforts to get the U.S. economy out of crisis have caused frustration within the administration that officials have not received the credits they believe they deserve.
“There were a few issues we could go through and challenges that many American families might face,” Yellen said. “These are problems we don’t have because of what the Biden administration has done. For this reason, credit is often not taken for problems that do not exist.”
Yellen traveled to Cleveland as part of a management push to highlight her major legislative gains—and the tens of billions of dollars in private sector investment these policies are channeling into manufacturing nationwide.
With significant federal investments to support or build key parts of infrastructure and critical supply chains, it’s a critical part of an economic strategy designed to address the many vulnerabilities and failures brought about by the outbreak of Covid-19.
Listing a number of major private sector investments, including the $20 billion Intel factory that opened a few hours outside of Columbus, Yellen said they were “real tangible investments happening right now,” although she acknowledged that it would take time to fully enact.
Yellen promised that these efforts will be felt as the economy progresses in the months and years to come. Asked if the administration’s general message to Americans was patient, Yellen said “Yes.”
“But you’re starting to see repaired bridges coming online – not in every community, but very soon. Many communities will see roads improved, bridges that have been destroyed repaired. We’re seeing the flow of money into research and development, a truly important long-term powerhouse for the American economy. And America’s We will become more powerful and a more competitive economy,” he said.
Yellen also touched on the battle lines drawn this week to raise the debt ceiling; This is now a permanent Washington crisis of its own making, which House Republicans have promised to leverage once again if they get a majority.
“The President and I agree that America should not be held hostage by members of Congress who think it is right to downgrade America and default on US Treasuries, the cornerstone of global financial markets,” Yellen said. .
However, Yellen, who has long emphasized the “destructive” nature of the showdowns, also took a step back from the complete abolition of the debt limit through legislation. A group of House Democrats wrote to Democratic leaders demanding this action in the lame duck session of Congress, but Biden rejected the idea this week.
Asked about the split, Yellen said only she and Biden agreed that “it’s really up to Congress to raise the debt ceiling.”
“This is extremely important to do and I would love to see it happen the way it can be,” Yellen added.
Management has made it clear that it does not plan to be one of them, as we move into a period that has traditionally led to the departure of senior officials from management. Asked about her reporting to the White House she wants to stay next year, Yellen said it was “an accurate reading”.
Yellen said, “I was very excited about the program we talked about. “And I see in that economic growth is greatly strengthened, addressing climate change and empowering American households. I want to be a part of that too.”
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