Saturday, June 10, 2023

Yellen: Recession not inevitable, gas tax holiday weighed on

Yellen: recession not inevitable, gas tax holiday weighed on

Aamer Madani. By

REHOBOTH BEACH, Dell ( Associated Press) – Treasury Secretary Janet Yellen said Sunday she expects the US economy to slow in the coming months, but a recession is not inevitable.

Yellen offered a dose of optimism, even as economists became increasingly concerned about a recession caused by rising inflation and the Russian invasion of Ukraine.

He also expressed an openness to helping motorists get some relief at the pump during a federal gas tax holiday during an interview on ABC’s “This Week.” Many lawmakers have held this view because the average price of gasoline is about $5 per gallon; The tax is 18.4 cents per gallon.

“It’s a consideration that’s certainly worth considering,” Yellen said as the administration was weighing it. He added that President Joe Biden wants “anything he can do to help consumers.” And Energy Secretary Jennifer Granholm said “it’s one of the tools,” but told Nation World News’s “State of the Union” that “part of the challenge with the gas tax, of course, is that it funds roads.” “

Yellen said overall consumer spending in the United States remains strong, while noting that spending patterns are changing, given the impact of rising food and energy prices. Yellen said household savings would help keep spending afloat during the coronavirus pandemic.

The national savings rate has fallen to nearly 6% from pre-pandemic levels, after reaching 16.6% in 2020, the highest on record dating to 1948 and 12.7% in 2021.

“I expect the economy to slow down,” Yellen said. “It is growing very fast and the economy has recovered and we have achieved full employment. We expect a transition to steady and steady growth, but I don’t think a slowdown is inevitable at all.

Yellen echoed Biden’s optimism in the face of economic headwinds. In an interview with The Associated Press last week, Biden stressed that a recession is “not inevitable” and made the case that the US is “in a stronger position than any country in the world to overcome this inflation.” “

Disagreeing with Biden and Yellen’s assessment, former Treasury Secretary Larry Summers told NBC’s “Meet the Press” that in his estimation, “the prime possibility would be that by the end of next year we would see a slowdown in the US economy.”

The Federal Reserve on Wednesday approved its biggest interest rate hike in more than a quarter century to curb inflationary gains. The move raised the target federal funds rate by three-quarters of a percentage point to a range between 1.5% and 1.75%.

The Fed’s economic outlook declined as monetary policy tightened, with the economy now slowing downward to a 1.7% rate of growth this year, with unemployment rising to 3.7% by the end of the year, and growth Continued up to 4.1% till 2024.

Yellen said it would require “skill and luck” to bring down inflation while maintaining low unemployment.

“I believe it is possible,” she said.

Nation World News Desk
Nation World News Desk
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