According to Janet Yellen, the US Secretary of Treasury, growth of moderate is
“appropriate and normal,” and the inflation is too high to rule out the risk of recession. She said that recession is “not completely off the table,” as she interviewed with CBS on Sunday in Beijing. She was in a meeting with various leaders in China.
She agreed that monthly job growth is on the slowdown. According to Yellen,
“We have a healthy economy, a great labor market, inflation too high and a concern of ours and the American people, but coming down over time.”
Yellen also added,
“And it’s my hope that, and belief, that there is a path to bring inflation down in the context of a healthy labor market. And the data that I’ve seen suggests we’re on that path.”
The so-much-talked-about recession in the US will likely begin toward the end of 2023. It can also coincide with a moderate consumption slowdown. Furthermore, inflation will also soften in June, but the pressure on prices is also making the economy uncomfortable. This makes the Federal Reserve tilt towards increased interest rates more.
On Wednesday, a government report showed that CPI (Consumer Price Index) increased by 3.1%, which is the lowest annual rate since March 2021. The core CPI rate also has increased by 5% from last year’s value. Although it is the smallest annual increase since 2021, it is still double what the Federal Bank has predicted.
However, US President Joe Biden said last month that the US will not see a recession. He added,
“It’s been coming for 11 months, well guess what? I don’t think it is going to come,” as he addressed Democratic Party donors on 27th June.