Economy

Yellen: U.S. GDP data shows strength but also healthy slowdown by Stocksak


© Stocksak. FILE PHOTO – U.S. Treasury secretary Janet Yellen speaks during a news conference at the Annual Meetings International Monetary Fund & World Bank in Washington (U.S.A.), October 14, 2022. REUTERS/Elizabeth Frantz/File Photo

By David Lawder

CLEVELAND (Stocksak), -U.S. Treasury secretary Janet Yellen stated on Thursday that the new GDP data shows strength in America’s economy, but also some evidence for a healthy slowdown that could have a positive effect on fighting high inflation

Yellen spoke to reporters in Cleveland to promote the Biden administration’s economic policies. She said that she still doesn’t anticipate a recession but that the U.S. government has the fiscal capacity to respond to economic weakness if necessary.

The U.S. economy grew 2.6% during the third quarter, rebounding from contractions earlier in the year. However, Commerce Department data overstated the nation’s economic health because domestic demand was the lowest in two years due to the Federal Reserve’s aggressive interest-rate hikes.

Yellen stated that “This is certainly a full-employment economy with a hot labor force market, which is great, but we want growth to slow down.” “It’s part to get inflation under control.”

“I’ve stated many times that I see a path to bringing down inflation while maintaining a strong labour market. And I think that this data is consistent what we would like to see,” Yellen said.

Yellen stated that she expects that the economy will slow further and that the government has fiscal room to respond if necessary. However, this should not be a deterrent to monetary policy.

Yellen stated, “We must be careful not to utilize fiscal policy to exacerbate a inflationary problem.” “But if it were — which is unlikely — but if there was a deep recessive, that was something I felt called for a response, then I believe we still have enough fiscal space.”

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