Yellen stated that the economy of the U.S. is improving despite global economic tension

Yellen stated that the economy of the U.S. is improving

October 13, 2022: -On Tuesday, Treasury Secretary Janet Yellen stated that the U.S. economy was “doing well” as increasing energy prices, Covid-19 variants, and Russia’s war with Ukraine has witnessed global markets in a vice grip.

“From the perspective of the United States, I think the United States is doing very well,” Yellen told on Tuesday.

The Treasury Secretary meets with world finance leaders at the International Monetary Fund and World Bank’s annual meetings this week in Washington, D.C.

She added that the economy was slow after a strong recovery, but a recent jobs report released in the pressure week revealed a “very resilient” economy. On Friday, the Bureau of Labor Statistics stated that nonfarm payrolls increased by 263,000 in September, while the unemployment rate decreased to 3.5%, tied for the lowest level since late 1969.

Consumers have been somewhat constrained by prices rising close to their fastest pace in over 40 years. The latest New York Fed Survey of Consumer Expectations stated that consumers expect the inflation rate a year from now to be 5.4%, the lowest number in a year, and refuse from 5.75% in August.

That level peaked at 6.8% in June and has been coming down since then, as the central bank has started a series of rate hikes totaling three percentage points. Markets anticipate the Fed to continue raising rates until it brings inflation down to its long-run target of 2%.

Yellen acknowledged that inflation is increasing and that decreasing it is a priority for the Biden administration. But she added that there is a way to maintain a healthy labor market.

“Firms, even with increasing interest rates, have debt burdens that are by and large manageable,” Yellen stated. She stated that U.S. financial markets continue to function well, and the Treasury is not seeing signs of deleveraging in an environment of tighter monetary policy.

Yellen also said the OPEC+ decision to decrease oil output and Russia’s ongoing war against Ukraine have also affected market liquidity. Still, there are no signs that merit serious concern. Worries about the strength of the U.S. dollar are a natural result of different paces of monetary tightening in the U.S. and other countries, she said.

“The dollar is a haven, so when times are uncertain, we experience capital inflows into our safe markets,” Yellen said. “And all those things are pushing up the dollar vis a broad range of countries.”

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