U.S. Treasury Secretary Yellen said recent inflation and employment data were encouraging, but also acknowledged the risk of a recession for the U.S. economy as interest rates remained high.
In an interview with Bloomberg News during a visit to Johannesburg, South Africa, on the 27th, the secretary said, “I’m reasonably satisfied with the data I’ve seen so far,” but said the Fed was “decelerating the economy.” “I don’t want to minimize the risk of a recession,” he said.
US GDP slows as Fed wants – Recession risk still lingers (2)
Source: U.S. Bureau of Economic Analysis
In the latest monthly survey by Bloomberg, economists expect the U.S. economy to contract in the second quarter and third quarter. They see a 65% risk of a recession over the next year.
“What I find encouraging is that I’m seeing inflation slowing,” Yellen said. “Layoff talk is on the rise, but fundamentally the labor market remains pretty tight,” he said.
Whether the Fed can achieve a soft landing if the economy avoids an unexpected shock will depend on labor market conditions, Yellen said. But that doesn’t mean the unemployment rate is going to avoid rising, he said.
“The path to slowing inflation while maintaining a strong labor market includes slowing growth,” Yellen said.
news-rsf-original-reference paywall">Original title:Yellen Sees Recession Risk Even With Improving Inflation, Jobs(excerpt)
