📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Yellen Says Economy 'Resilient,' but Flags 'Too High' Inflation

Published 07/28/2022, 01:37 PM
Updated 07/28/2022, 02:09 PM
© Reuters.

By Yasin Ebrahim

Investing.com -- U.S. Treasury Secretary Janet Yellen on Thursday said the U.S. economy was "resilient," but flagged challenges ahead including "too high" inflation.

Data on Thursday showed the U.S. economy slipped into a technical recession after reporting a second-straight quarter of declining economic growth.

Yellen said, however, it was important to "look beyond the headline number," and noted that the usual signs that point to an economic recession weren't yet prevalent.

The data haven't flagged the typical kinds of distress associated with a recession, said Yellen, highlighting the "exceptionally strong" labor market, strong consumer household balance sheets and credit quality and lack of sharp increases in business bankruptcies.

The Treasury Secretary said while the economy is slowing, it is transitioning to more "steady, sustainable growth," amid a continued expansion in consumer spending, services activity and a "notable strength in net exports."

Yellen acknowledged numerous risks to the economy on the horizon including the red-hot pace of inflation, the outcome of the war in Ukraine, COVID lockdowns in China and pandemic-related supply chain snarls.

The Federal Reserve, however, is taking the "right measures" to tackle inflation, driven by a tight labor market, supply-chain issues, and rising food and energy.

The Fed raised rates by 75 basis points on Wednesday in an effort to further dent aggregate demand that the central bank hopes will bring inflation down.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.