Yellen Optimistic About Soft Landing Amid Banking Crisis
US Treasury Secretary Janet Yellen has stated that a soft landing is still possible despite the banking crisis that has shaken the financial field all over the world. «Are there risks? Of course. I do not want to underestimate the risks here, but I think it is possible,» Yellen said.
Yellen further added that she believes there is a way to keep inflation down while maintaining a strong labor market. She also stated that the factors that increase inflation go far beyond the tightness seen in the US labor market, and highlighted Russia’s war in Ukraine as one such factor that has led to an increase in food and energy prices.
Additionally, Yellen believes that supply chain disruptions during the pandemic have also caused significant material shortages, which have clogged critical parts of the economy, such as the automobile industry. However, Yellen also stated that the US economic data announced this week show that signs of cooling continue in areas such as inflation and consumer spending.
«We’re seeing supply chain bottlenecks that drive inflation, they’re starting to unravel,» Yellen said. Despite the risks, Yellen maintains that a soft landing is still possible for the US economy.
