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“‘I don’t expect a recession. I think that we’re on a good path to bringing inflation down.’ ”
Treasury Secretary Janet Yellen on Monday sounded an optimistic note on the prospect of avoiding a recession, citing the strength of the U.S. labor market and “encouraging” inflation data.
“I don’t expect a recession,” the treasury chief said in a Bloomberg Television interview, speaking from India on the sidelines of a Group of 20 finance officials’ meeting.
“I think that we’re on a good path to bringing inflation down,” said Yellen. “The most recent inflation data were quite encouraging.” She added, “I think we’re on a good path in the United States.”
Now read: Inflation in the U.S. has cooled off significantly. Great. Here’s what’s not so great.
Last week, government data showed that U.S. consumer prices rose just 0.2% in June, and the rate of inflation slowed to the lowest level since 2021. Wholesale prices have dropped even further, with the producer-price index essentially flat over the past year.
Fears of a U.S. recession eased after the release of the June consumer-price data. Economists saw a greater chance the Federal Reserve might not have to “slam on the brakes” to get price pressure under control.
See: Recession worries dissipate, pushing down MarketWatch’s weekly gauge
Yellen spoke after weaker-than-expected data from China, and noted that slow growth there can have some “negative spillovers” for the U.S.
U.S. stocks
DJIA,
COMP,
were making modest gains Monday after the news on China’s economy damped risk appetite across global markets.
