Yellen on Recession Risks, Inflation, and the Labor Market

US Treasury Secretary Janet Yellen cautioned that the risk of a recession cannot be entirely dismissed because inflation remains exceptionally high across the country. While acknowledging the persistence of price pressures, she stressed that the economy does not face a foreordained downturn. The job market, she noted, remains resilient, and this stability could lead to a slower pace of employment growth rather than a sharp contraction in activity. Yellen pointed to prudent policy measures that could ease inflation without tipping the economy into recession, underscoring that a softer inflation path is achievable with sustained demand management and careful monetary coordination. These remarks come as officials and analysts weigh the balance between restoring price stability and maintaining robust growth. In this view, the objective is to cool inflation gradually while preserving momentum in American hiring and output, a balance that many observers believe is attainable with the right mix of fiscal discipline and monetary steadiness.