Janet Yellen: labor market is strong now but won’t be if inflation stays high

Treasury Secretary Janet Yellen said she remains hopeful the US economy can avoid recession, but added that Americans understand the need for the Federal Reserve to beat inflation.

“The Fed is going to need a lot of skill and also a little bit of luck to pull off what we sometimes call a soft landing,” Yellen said Sunday in a CNN “State of the Union” interview. .

“I hope we achieve a soft landing, but Americans know that getting inflation down is key, and longer term, we can’t have a strong job market without inflation in check.” , she said.

The remarks align him with Fed Chairman Jerome Powell, who said last week that he and his fellow central bank policymakers were “strongly committed” to bringing inflation, which remains close to a high of 40 years.

His words prompted investors to raise their expectations for a third consecutive three-quarter percentage point hike at the Fed’s Sept. 20-21 policy meeting.

Yellen said President Joe Biden’s administration would leave monetary policy to the Fed. “I think our goals are very well aligned,” she said. “We want to see a strong labor market and inflation return to more normal levels.”

The Treasury chief also said the growth rate of the U.S. economy was slowing, a natural consequence of rising rates, although the job market remained “exceptionally strong” with nearly two vacancies for every worker seeking employment. a job.

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