The economy of the United States could recover with more fear than harm. “I don’t think a recession is inevitable,” US Treasury Secretary Janet Yellen told ABC News on Sunday. A declaration only a few days after a new increase in the key rates of the American central bank which raises fears of the prospect of an economic contraction. Janet Yellen concedes, however, to expect “the economy to slow down” 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 sharply, in an attempt to curb galloping inflation. “(Fed) Chairman Powell has said his goal is to reduce inflation 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,” Yellen said.
“Very high” spending by Americans to avoid recession?
The US economy has already slowed with a 1.5% contraction in GDP in the first quarter, and the start of the second quarter seems to show that the slowdown is continuing in certain sectors such as manufacturing, real estate and retail sales.
A survey by the Conference Board institute 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. But the Treasury Secretary sees reason to hope that a recession does not materialize, especially with consumer spending remaining “very strong”, she said.
“It’s clear that most consumers – even lower-income households – continue to have savings that can act as a buffer and allow them to continue spending,” Janet Yellen told ABC News.