“Recession is not inevitable” Inflation in the United States explained by Russia’s “invasion” in Ukraine

US Treasury Secretary Janet Yellen statedsanctions against Russia Special military operation in Ukraine bear the costs for the American economy. He told about this in an interview he gave to a TV channel on Sunday, June 19th. A B C.

An impending recession is by no means inevitable, he said, as the Federal Reserve is “taking increasingly aggressive steps to combat rising inflation.”

“I expect the economy to slow down. Both the economy and the labor market grew very quickly as we recovered and reached full employment. It is natural that we now expect a transition to sustainable and stable growth, but I do not think that a recession is inevitable at all.

Clearly, inflation is unacceptably high and President Joe Biden’s top priority is to bring it down.

And Fed Chairman Jerome Powell said his goal is to keep inflation down while maintaining a strong labor market. “It will take skill and luck, but I believe it’s possible,” he said.

The current annual inflation rate in the United States is 8.6%, the highest in 40 years, according to the latest data from the Bureau of Labor Statistics. The Fed raised interest rates by 0.75 percentage points this week, the biggest since 1994.

A higher interest rate increases the cost of borrowing for consumers and businesses and reduces demand, potentially slowing inflation. “Consumer spending remains very high. There is fluctuation from month to month, but overall spending is high, although its composition changes and higher food and energy prices certainly affect consumers,” he said, adding that “bank accounts are high.”

“Clearly, most consumers, even lower-income households, continue to have a savings buffer that will allow them to support spending. So I don’t see falling consumer spending as the likely cause of a recession in the coming months. And the labor market is very strong, perhaps the strongest in the post-war era,” he said.

Yellen attributed the inflation in part to “Russia’s invasion of Ukraine” and said the conflict was driving up global energy and food prices.

He acknowledged that “the side-effect of energy prices is actually half that of inflation, but that Biden is working to ensure that oil prices do not go higher.”

Gas prices remain at record levels after several months of growth. The current average cost of gasoline in the US is a record $4.98 per gallon. Recalling the “historic” oil release from the US strategic reserve, Yellen said, “Biden is ready to go and is calling on oil and oil products and gas producers to work with him to increase supply and lower gas and energy prices.”

The head of the US Treasury said that gas prices have risen sharply, which is “clearly putting a burden on households”. “President Biden wants to do everything he can to help consumers,” Yellen said.

“It is important to recognize that the United States is certainly not the only advanced economy suffering from high inflation. We see it in England, we see it in France, Germany, Italy, and the reasons are global, not local.

We stand with our allies to take the necessary steps to punish and retaliate Russia for what it has done in Ukraine. It has a cost to us as well,” he said.

Sanctions on Moscow

Recall during the visit of German Chancellor Olaf Scholz to Serbia on 10 June. requested From Belgrade he will participate in EU sanctions against Russia.

“Chancellor Scholz very openly and sharply demanded that Serbia join the sanctions against the Russian Federation, ie. “To support the restrictive measures the EU has already put in place against Russia,” said Serbian President Aleksandar Vucic.

3 June EU approved The sixth package of restrictions on the Russian Federation. An embargo on overseas supplies of oil and petroleum products from Russia has been delayed for six months, includes the disconnection of several more banks from SWIFT, as well as the suspension of the broadcast of a number of Russian TV channels in the EU.

US Treasury Secretary Janet Yellen said the impending recession is not inevitable for the US. She acknowledged that inflation in the country was unacceptably high and that the White House’s top priority was to reduce it. The Secretary of the Treasury said that the conflict in Ukraine has led to a rise in world prices of energy and products, so President Joe Biden wants to do everything possible to help consumers. Read more in the article “socialbites.ca”.



Source: Gazeta

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Popular

More from author

Which teams will qualify for the Copa Libertadores 2023 and the Copa Sudamericana 2023 of the Betplay Dimayor League 2022?

Colombia has four places for the maximum continental competition and another four for the 'Other half of glory'.The Betplay League 2022 continues to the...

Experts listed the cars whose prices fell or increased in the fall 09:49

Cars of eight brands this fall in Russia have become cheaper or more expensive. About informs Portal "Automatic News of the Day" with...

The expert spoke about the dangers of buying imported foreign cars

Parallel import works and hundreds of cars are imported into Russia. At the same time, it is easier and cheaper for private individuals...