Treasury Secretary Janet Yellen, who navigates the financial landscape of the U.S., joins journalist David Gura to discuss the current state of the economy. Yellen reassures that there are no alarm bells for the financial system, asserting that the U.S. is experiencing a soft landing despite signs of weakening job growth. She also delves into the significance of rebuilding U.S.-China relations, emphasizing collaboration on critical global issues like climate change and fair trade, and the importance of maintaining open dialogues amidst geopolitical tensions.
Janet Yellen asserts that the U.S. economy has achieved a soft landing despite recent job growth declines and inflation concerns.
She emphasizes the need for constructive U.S.-China relations to effectively tackle global challenges like climate change and economic stability.
Deep dives
Intel's AI Breakthroughs for Enhanced Business Performance
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Janet Yellen's Views on the Labor Market and Economic Recovery
Janet Yellen assesses the current state of the economy as fundamentally strong, noting that the labor market is operating close to full employment. She cites the addition of 142,000 jobs in the last month and a slight decrease in the unemployment rate to 4.2%, indicating a healthy job market despite recent downward revisions in job growth. Yellen emphasizes the importance of consumer and investment spending as key drivers of continued economic growth, while also recognizing challenges stemming from inflation and a tightened labor market. Her outlook suggests a 'soft landing' for the economy, where growth can continue without significant downturns or recessions.
Addressing Supply Chain Disruptions and Inflation
Yellen highlights that many recent inflationary pressures stemmed from unique supply side shocks, including semiconductor shortages faced by automakers and shifts in consumer behavior during the pandemic. These disruptions led to significant price increases and a notable rise in demand for goods, contributing to the inflationary environment. Yellen points out that the economic adjustments have played a crucial role in moderating inflation rates, as the economy adapts to post-pandemic realities. She stresses the need for policies that prevent excessive inflation while maintaining a focus on employment and overall economic stability.
International Diplomacy in U.S.-China Relations
In her role as Treasury Secretary, Yellen underscores the necessity of effective diplomacy between the U.S. and China to address various global challenges collaboratively. She discusses the steps taken to mend frayed relations, particularly after the pandemic, and emphasizes the importance of maintaining open lines of communication on pressing matters like national security and economic policies. Yellen has articulated her approach as one focused on fostering constructive dialogues while addressing mutual concerns, thereby reinforcing cooperative efforts on issues such as climate change and economic stability. Her commitment to rebuilding alliances highlights the critical nature of international collaboration in navigating complex global dynamics.
Treasury Secretary Janet Yellen said there are no “red lights flashing” for the financial system, and reiterated her view that the US economy has reached a soft landing even as job growth weakens. She speaks with Bloomberg News’ David Gura at the Texas Tribune Festival.