(CNN) last month banking sector We are not holding America back from achieving our goals. soft landingTreasury Secretary Janet Yellen told CNN’s Fareed Zakaria in an exclusive interview on Friday.
“I think there’s definitely a way to bring down inflation while maintaining what everyone thinks is a strong labor market,” Yellen said. “And the evidence I’m seeing suggests we’re on that path.”
“Is there a risk? Of course. I don’t want to underestimate the risk here, but I think it’s possible.”
Yellen said the factors driving inflation were: US labor market,especially russian ukrainian war, raised food and energy prices.and Pandemic Era Supply Chain Disruptioncaused a major shortage of goods that wrecked a significant part of the economy, automobile industry, etc..
“We are seeing supply chain bottlenecks that have pushed up inflation, but they are beginning to resolve,” she said. “There has been a big change in people’s lifestyles and low interest rates, which has caused home prices to rise significantly. Now home prices have essentially calmed down.”
To watch Fareed Zakaria’s exclusive interview with Treasury Secretary Janet Yellen, tune in to “Fareed Zakaria GPS” this Sunday at 10am ET.
Yellen said some stress in the labor market has eased, with more jobless claims, fewer job openings and a higher labor force participation rate. A looser labor market would bring inflation down, but that doesn’t mean a big rise in unemployment is needed, she said.
“I think a strong labor market and low inflation are compatible goals,” he said.
U.S. economic data released last week signs of cooling continue In areas such as inflation and consumer spending.
last month, The collapse of Silicon Valley Bank and signature bank It has triggered a crisis in the U.S. banking sector, disrupted financial markets and heightened uncertainty about possible spillovers across the broader economy.
The Treasury Department, in cooperation with the Federal Reserve System and the Federal Deposit Insurance Corporation, intervened After a local bank failed to ensure bank customers had access to all their money and prevent future bank runs.
The actions taken by the Treasury Department, Fed and FDIC “stopped the systemic threat that was there,” Yellen told Zakaria.
“Americans should be aware that America has a safe and strong banking system,” she said. “Our banking system is well-capitalized and liquid, and the problems faced by some banks are not common problems throughout the banking system. We’ve taken steps to make it feel like it used to be and could be used again if a problem with a single bank or multiple banks ran the risk of infecting the system. I used to do it.”
Banks are likely to become “moderately cautious” in their operations, which may result in less credit being available. Fed officials say tightening credit could help keep inflation in check.
But bank failures have raised uncertainty about the likelihood of additional bank failures and possible aftershocks that could plunge the U.S. economy into recession. The Fed is coming to an end of a historic rate hike campaign to bring down inflation.
That’s not the case now, Yellen said.
“Right now, we don’t see anything dramatic or significant enough to change the outlook,” Yellen said. “I think the outlook for moderate growth and a continued strong labor market with lower inflation remains unchanged,” he said.
Yellen’s interview with Zachariah came near the end of a week jam-packed with meetings, public appearances and Treasury Secretary speeches. IMF-World Bank Spring MeetingUkraine was a key focus.
In an interview with Zakaria, Yellen said Russia should pay for the damage caused in Ukraine and that talks are underway on potential mechanisms to make that happen.
“I think this is the responsibility that the international community expects from Russia,” she said. “This is something we are discussing with our partners, but there are legal restrictions on what we can do with frozen Russian assets.”