A recession in the United States is not “inevitable”, says the secretary of the Treasury – Actu Orange

AFP, published on Sunday June 19, 2022 at 7:52 p.m. US Treasury Secretary Janet Yellen said on Sunday that a recession was not “inevitable” in the United States, a few days after a new increase in key rates by the US central bank which raises fears of the prospect of an economic contraction. “I don’t think a recession is inevitable,” Yellen told ABC News, conceding, however, that she expected “the economy to slow down” in the as part of a transition to “slow and stable growth”. The hypothesis of a recession in the United States is gaining momentum after the historic decision on Wednesday by the central bank (Fed) to raise its key rates by three quarters points, with the aim of curbing galloping inflation. “(Fed) Chairman Powell has said his goal is to bring inflation down while maintaining a strong job market. It’s going to take skill and luck, but I believe it’s possible” , the Treasury Secretary said, calling the level of inflation “unacceptable”. “It’s President Biden’s priority to reduce it,” said Yellen. The Treasury Secretary pointed to Russia’s war in Ukraine as one of the reasons for these price increases. food and fuels. The main economic adviser to the White House, Brian Deese, said for his part on Sunday on CBS News that the United States should seek to obtain “stable growth, without erasing all the incredible economic gains” made. On Wednesday, Fed Chairman Jerome Powell assured that the institution was not trying to “induce a recession”, but to “reduce inflation to 2%”, and to maintain “a solid labor market”. – “Two years” to curb inflation – The Fed is now counting on 5.2% inflation this year, when it was still anticipating 4.3% at its March meeting. At the same time, it forecasts growth of only 1.7%, against 2.8% previously. “It will take two years” to bring inflation down to 2%, Cleveland Fed President Loretta Mester said on Sunday. during an interview on CBS. She insisted on the need to “moderate demand” so that it is better aligned with supply, but she does not “predict a recession”. The American economy has d already slowed with a 1.5% contraction in GDP in the first quarter, and the slowdown seems to be continuing in certain sectors such as manufacturing, real estate and retail sales. A survey by the Conference institute Board recently revealed that 76% of the 750 bosses questioned considered either that a recession was looming on the horizon or that it was already effective. hypothesis of a recession of the American economy “by the end of next year e” is the most “probable”. “All historical precedents point to a recession,” Bill Clinton’s former minister added on Sunday on NBC. But current Treasury Secretary Janet Yellen sees reason to hope that a recession does not materialize, in particular thanks to consumer spending. “It’s clear that most consumers – even lower-income households – continue to have savings that can act as a buffer and allow them to keep spending,” she told ABC News. minister further argued that the job market was also “very strong”, “probably the strongest” since the end of the Second World War. – Temporary freeze – Faced with the concerns of American households, Janet Yellen considered that a temporary freeze on federal fuel taxes at the pump is “an idea worth considering.” On CNN, Energy Minister Jennifer Granholm said Sunday that such a freeze represents “the “one of the tools” envisaged to reduce inflation, but that “in the first place”, the government wanted to increase the supply of fuels – in particular by asking the oil-producing countries to increase their production. “We know that this will be a rough summer,” with the holiday season coming” just getting started,” the minister said of fuel prices. “We know there will be continued upward pressure on demand,” she added. United States was thinking about modifying some of them.