Just days after the US Federal Reserve hiked interest rates, Treasury Secretary Janet Yellen said on Sunday June 19 that the US recession was not “inevitable”.
Raising fears of an economic contraction, Yellen conceded that “it is clear that inflation is at an unacceptable level.”
Attributing this in part to the war in Ukraine, she said she does not believe that “a decline in consumer spending is the likely cause of a recession.”
Anticipating that the pace of inflation would slow in the coming months, Yellen argued that the US labor market is “arguably the strongest in the post-war period.”
Soaring inflation and war-exacerbated supply chain issues in Ukraine have heightened pessimism after the US economy recovered strongly from the damage caused 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 U.S. central bank raised the benchmark borrowing rate by 0.75 percentage points on Wednesday, Wall Street stocks fell.
As people begin to delay vacation plans, economists are seeing worrying signs of weakening consumer confidence.
Adobe Analytics reported that people were starting to delay their vacation plans. Domestic flight bookings fell 2.3% last month.
(With agency contributions)
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