Treasury Secretary Janet Yellen said Sunday that she expects the U.S. economy to slow in the months ahead, but that a recession is not inevitable.
During an interview with ABC, Yellen offered a dose of optimism even as economists grow increasingly worried about a recession fueled by skyrocketing inflation and the Russian invasion of Ukraine. She also expressed an openness to a federal gas tax holiday to help give motorists some relief at the pump. Several lawmakers have floated the idea as the average price of gasoline hovers around $5 per gallon; the tax is 18.4 cents per gallon.
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 during the coronavirus pandemic will help sustain spending.
“I expect the economy to slow,” Yellen said. “It’s been growing rapidly and the economy has recovered and we have achieved full employment. We expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”
Agreeing with the statement that Biden had recently made about recession not being inevitable, Yellen made the case that the U.S. is “in a stronger position than any nation in the world to overcome this inflation.”