Treasury Sec. Janet Yellen said that she anticipates the “economy to slow” during a Sunday morning interview on “This Week.”
Host George Stephanopoulos cited a new Wall Street Journal report from Sunday that said economists expect the likelihood of a recession to be 44% within the next year.
“Is that what you expect as well?” Stephanopoulos asked.
“Well, I expect the economy to slow. It’s been growing at a very rapid rate as the labor market has recovered, and we’ve reached full employment, it’s natural now that we expect to transition to steady and stable growth. But I don’t think a recession is at all inevitable.”
Treasury Sec. Janet Yellen tells @GStephanopoulos that a recession isn’t “inevitable,” but says inflation is “unacceptably high.”
— This Week (@ThisWeekABC) June 19, 2022
“Clearly inflation is unacceptably high, it’s President Biden’s top priority to bring it down,” Yellen added. (RELATED: The Guy Who Presided Over The 2007-2008 Financial Crisis Now Says There Will Be No 1970’s-Style ‘Stagflation’)
Yellen’s comments come just days after the Federal Reserve hiked target interest rates by three-quarters of a percentage point, projecting a slowing economy and a rise in unemployment. Gross domestic product is now expected to increase by just 1.7%, a 1.1% drop from March projections of 2.8%, according to CNBC.
Consumer prices have also reached a four-decade high, data from the Bureau of Labor Statistics show. The consumer price index for May of 2022 climbed 8.6% in the last year, marking the largest 12-month increase since 1981.
Yellen has previously downplayed the possibility of a recession, saying recently on CNN that it was unlikely. Former Treasury Sec. Larry Summers criticized her remarks and said “there’s certainly a risk of recession in the next year.”