TIMES.KY

Cayman Islands, Caribbeanand International News
Friday, Oct 11, 2024

Recession isn't 'inevitable' but inflation remains 'unacceptably high'

Recession isn't 'inevitable' but inflation remains 'unacceptably high'

A coming recession is not "at all inevitable" as the Federal Reserve takes aggressive actions to address inflation, Treasury Secretary Janet Yellen said Sunday

A recession is not "at all inevitable" as the Federal Reserve takes increasingly aggressive action to address sharply rising inflation, Treasury Secretary Janet Yellen said Sunday.

"I expect the economy to slow," Yellen told "This Week" anchor George Stephanopoulos. "It's been growing at a very rapid rate, as the economy, as the labor market, has recovered and we have reached full employment. It's natural now that we expect a transition to steady and stable growth, but I don't think a recession is at all inevitable."

"Clearly, inflation is unacceptably high," Yellen continued. "It's President [Joe] Biden's top priority to bring it down. And [Fed] Chair [Jerome] Powell has said that his goal is to bring inflation down while maintaining a strong labor market. That's going to take skill and luck, but I believe it's possible."

The current inflation rate, year-over-year, is at a 40-year high of 8.6%, according to the most recent data from the Bureau of Labor Statistics.

On Wednesday, in an effort to cool those rising costs, the Fed increased interest rates by three-quarters of a percentage point -- marking the largest rate increase since 1994. A higher interest rate increases borrowing costs for consumers and companies, potentially slowing inflation by decreasing demand.

"You say it's not inevitable, but I guess the question is: Is it likely?" Stephanopoulos pressed Yellen, citing data on consumer pull-back and slowing movement in the job market and noting that she, Biden and Powell were all wrong about inflation's lasting impact last year.

"Consumer spending remains very strong. There's month-to-month volatility, but overall spending is strong, although patterns of spending are changing and higher food and energy prices are certainly affecting consumers," Yellen said.

"But bank balances are high," she continued. "It's clear that most consumers, even lower-income households, continue to have buffer stocks of savings that will enable them to maintain spending. So I don't see a drop-off in consumer spending as a likely cause of the recession in the months ahead. And the labor market is very strong, arguably the strongest of the post-war period."

Yellen attributed inflation partly to Russia's invasion of Ukraine, saying the conflict had increased global prices on energy and food.

"It's important to recognize that the United States is certainly not the only advanced economy suffering from high inflation," Yellen said. "We see it in the U.K., we see it in France, Germany, Italy; and the causes of it are global, not local."

She said "energy prices spillover is really half of inflation," but that Biden has been working to keep oil prices from going even higher.

Gas prices remain at record highs after months of increases. The current national average is about $4.98 per gallon.

Yellen cited Biden's "historic" release of oil from the strategic petroleum reserve over six months in an effort to reduce prices -- though costs continue to climb.

"[Biden] stands ready to work and is encouraging producers of oil and refined products, gas, to work with him to increase supplies, to bring gas prices and energy prices down," Yellen said.

On Wednesday, Biden sent a letter to seven major oil refiners in the U.S., blasting them for posting record profits while consumers face record-high gas prices and calling on them to increase production.

The American Petroleum Institute fired back, with its CEO and president arguing it's "the administration’s misguided policy agenda shifting away from domestic oil and natural gas [that] has compounded inflationary pressures and added headwinds to companies’ daily efforts to meet growing energy needs while reducing emissions."

"How do you respond to that?" Stephanopoulos pressed.

"I don't think that the policies are responsible for what's happening in the oil market," Yellen said. "I think that producers were partly caught unaware of the strength of the recovery in the economy and weren't ready to meet the needs of the economy. High prices should induce them to increase supplies over time."

While long-term efforts to bring down the cost of gas are being debated, Stephanopoulos asked about the short term.

"Several in Congress are calling for gas tax holidays. Prices average around $5 a gallon. Is that on the table?" Stephanopoulos asked.

"President Biden wants to do anything he possibly can to help consumers," Yellen said. "Gas prices have risen a great deal and it's clearly burdening households. So he stands ready to work with Congress, and that's an idea that's certainly worth considering."

Yellen also said the administration is considering lifting some Trump-era tariffs on Chinese goods.

"We all recognize that China engages in a range of unfair trade practices that it's important to address," Yellen said. "But the tariffs we inherited, some serve no strategic purpose and raise costs to consumers. And so, reconfiguring some of those tariffs so they make more sense and reduce some unnecessary burdens is something that's under consideration."

Newsletter

Related Articles

TIMES.KY
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×