U.S. setback not ‘inevitable’, says Treasury Secretary

US Treasury Secretary Janet Yellen says she is cautious about the current economic situation. All scenarios are possible. Regression is one of them.

US Treasury Secretary Janet Yellen said on Sunday that a regression was not “inevitable” in the United States, days after another hike in key rates by the US central bank raised fears of the prospect of an economic contraction. .

“I don’t think a regression is inevitable,” Yellen told ABC News, conceding, however, that she expects “the economy to slow down” as it transitions to “slow and slow growth.” stable”.

As a reminder, for the past few months, the American central bank (Fed) has been raising key rates to deal with inflation, while taking care not to panic the financial markets. It could still increase them by July. The institution had abruptly lowered its rates in March 2020, in a range of 0 to 0.25% to support the economy in the face of the threat posed by the Covid-19 pandemic.

The US economy has already slowed with a 1.5% contraction in GDP in the first quarter, and the start of the second quarter seems to show that the slowdown is continuing in certain sectors such as manufacturing, real estate and retail sales.

A survey by the Conference Board institute recently revealed that 76% of the 750 patrons questioned considered either that a decline was on the horizon, or that it was already effective. But the Treasury Secretary sees reason to hope that a pullback does not materialize, especially with consumer spending remaining “very strong”, she said.

“It’s clear that most consumers – even lower-income households – will continue to have savings that can act as a buffer and allow them to keep spending,” Janet Yellen told ABC News.

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