Home » US Treasury Secretary optimistic: Yellen: Soft landing is possible

US Treasury Secretary optimistic: Yellen: Soft landing is possible

by admin
US Treasury Secretary optimistic: Yellen: Soft landing is possible

US Treasury Secretary optimistic
Yellen: Soft landing is possible

For a year now, the US Federal Reserve has been fighting high consumer prices with significant interest rate hikes. According to the lesson, tight monetary policy increases the risk that the central bank will stall the economy. US Treasury Secretary Yellen is still optimistic.

US Treasury Secretary Janet Yellen assumes that the fight against persistently high inflation will not slow down the US economy too much. “I think what you call a soft landing is possible,” Yellen said on US television. A soft landing means getting out of the situation without major economic upheavals.

“I think we probably need some easing in the labor market to bring inflation down, but that doesn’t mean unemployment has to rise,” Yellen said. A currently slower economic growth is not surprising because the economy is working close to its capacity due to low unemployment. “So I think the prospects for moderate growth and a continued strong labor market with inflation falling remain intact,” Yellen said. Of course there are risks. However, she believes that a strong labor market and lowering inflation are compatible.

For about a year, the US Federal Reserve has been fighting high consumer prices with significant interest rate hikes. According to the theory, with a tight monetary policy the risk also increases that the central banks slow down the economy so much that the economy is stalled. A strong labor market is also a cause for concern: there is a risk of a wage-price spiral if there is a shortage of workers in important sectors and consumer prices remain high.

Inflation in the USA had recently eased noticeably: the annual rate of inflation fell by a full percentage point to 5.0 percent in March. This is the lowest inflation number since May 2021. The Federal Reserve can look back on the abating of the wave of inflation after nine interest rate hikes in a row as a stage victory, even if its target of an inflation rate of 2.0 percent is still not in sight.

See also  Palermo FC, SumUp takes to the field as the team's official sponsor

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy