Treasury Secretary Janet Yellen believes inflation should continue to recede over the next year unless there are some unexpected shocks to the global economy, according to a CBS report.
Yellen does believe there is a risk of recession. “But it certainly isn’t, in my view, something that is necessary to bring inflation down,” Yellen told 60 Minutes correspondent Norah O’Donnell.
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“Economic growth is slowing substantially. And businesses see that. Look, we had a very rapid recovery from the pandemic. Economic growth was very high. And there was a surge in hiring, put people back to work. We got people back to work. We closed that gap. We have a healthy labor market. To bring down inflation, and because almost everybody who wants a job has a job, growth has to slow,” Yellen said.
The Treasury Secretary also pointed out the United States is at or beyond full employment. “And so it is not necessary for the economy to grow as rapidly as it has been growing to put people back to work,” she said.
Price Action: Major Wall Street indices closed in the red on Friday following the release of a higher-than-expected producers’ price index reading. All attention turned towards the consumer price inflation set to be released on Tuesday and the crucial FOMC meeting where the Fed is expected to hike its policy rates by 50 basis points on Wednesday.
The SPDR S&P 500 ETF Trust SPY closed 0.75% lower on Friday while the Vanguard Total Bond Market Index Fund ETF BND ended 0.58% lower.
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