WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said she believes the Federal Reserve can reduce inflation without triggering a recession because of the strength of the job market and the balance sheet of U.S. households, the low cost of debt and the strength of the banking sector.
Yellen told a House Financial Services Committee hearing on Thursday that «all of those things suggest that the Fed has a path to bring down inflation without causing a recession, and I know it will be their goal to try to do that.»
During the hearing on the work of the Financial Stability Oversight Council, he added that inflation is the «number one economic problem» facing the country and the government of President Joe Biden.
“It is having a substantial adverse impact on many vulnerable households and we are laser-focused on tackling inflation,” Yellen said, reiterating government initiatives to keep gasoline prices low through large releases of oil from the Strategic Reserve and efforts to unblock the country’s congested ports.
Yellen deflected several attempts by Republican lawmakers to try to convince her to blame high inflation on the Biden administration’s $1.9 trillion COVID-19 relief spending package last year.
He said several factors are fueling inflation, including increases in energy prices due to Russia’s invasion of Ukraine and ongoing supply chain problems caused by the pandemic. He also added that other countries are also experiencing high inflation.
«It shows that there are factors beyond US spending that are critical to inflation,» he said.
Data on Thursday showed the US labor market remained tight while producer price inflation began to slow, rising 0.5% in April compared with 1.6% in March, the Department said. of work.
(Reporting by David Lawder; edited in Spanish by Carlos Serrano and Manuel Farías)