This past Sunday, Janet Yellin, the current Treasury Secretary, threw blame onto many global factors for the American peoples dwindling purchasing power and issued a declaration stating that a recession is “not at all inevitable,” despite a growing consensus that the U.S. could soon discover that one is already deep underway.
While making an appearance on “This Week with George Stephanopoulos,” from ABC, the former chair of the Federal Reserve agreed that inflation is at “unacceptably high levels” but stated that a recession might not actually be anywhere close by.
“I expect the economy to slow,” stated Yellen. “It’s been growing at a very rapid rate, as the economy, as the labor market, has recovered. We have reached full employment. It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”
A recession is normally defined as two consecutive quarters of negative economic growth. Because the U.S. gross domestic product fell at a yearly rate of roughly 1.5% for the first quarter of 2022, whether or not the U.S. is now in a recession will be determined once this month has passed and the second quarter of the year finished.
Treasury Sec. Janet Yellen tells @GStephanopoulos that a recession isn't “inevitable," but says inflation is "unacceptably high."
— This Week (@ThisWeekABC) June 19, 2022
The idea that the U.S. could squeak by without going into recession is a hopeful one that has been recently echoed by Old Uncle Joe in a claim made this past Thursday as part of an interview with the Associated Press that a recession is “not inevitable.” However, many business leaders are resigning themselves to the idea that the country is in fact already struggling with a recession.
Yellen, like President Biden and current Federal Reserve Chairman Jerome Powell, firstly tried to insist this past year that the inflation was only “transitory” and would soon slow down and fade, and hurled the blame for it on things that they claimed were beyond the control of the president and his administration. In particular, Yellen solidly places the blame on the war happening in Ukraine, which has heavily global supply chains.
She stated that Americans have enough savings built up in order to make sure consumer spending stays high, which could help thwart a recession. She also stated her support for a gasoline tax “holiday,” that would provide a bit of relief to the American public in regard to insane prices a the pump.
The yearly rate of inflation across the U.S. spiked up to 8.6% in May, a four-decade record. The cost of energy went up by 34.6% mostly due to the almost 50% increase in the price of gasoline. However, good costs also spiked by 10.1%, the first increase of over 10% since back in 1981, as reported by tradingeconomics.com.