U.S. Treasury Secretary says recession is not inevitable, CEOs say it is on the way
U.S. Treasury Secretary Janet Yellen's recent remarks that a recession is not inevitable have been met with skepticism by critics. In an interview with ABC's "This Week," Yellen said that she believes a recession is not certain.
June 20, 2022 11:00am
Updated: June 20, 2022 3:22pm
(The Center Square) - U.S. Treasury Secretary Janet Yellen's recent remarks that a recession is not inevitable have been met with skepticism by critics.
In an interview with ABC's "This Week," Yellen said that she believes a recession is not certain.
"I expect the economy to slow," Yellen said. "I don't think a recession is inevitable."
In an interview with The Associated Press last Thursday, President Biden made similar comments.
"First of all, it's not inevitable," Biden said. "Secondly, we're in a stronger position than any nation in the world to overcome this inflation."
This is in stark contrast with what most business leaders are predicting.
According to a new research report by The Conference Board, a nonprofit business membership and research group, more than 60% of CEOs globally expect a recession in their respective regions of operation.
An additional 15% say they are already in the midst of a recession.
Consumers, too, are doubtful about the future of the economy.
A Federal Reserve Bank of New York survey found that 28.6% of consumers say they were "somewhat worse off" in May of 2022 than they were a year ago. Another 10.8% said they were "much worse off."
Critics also pointed out that Yellen previously claimed inflation was "transitory" before later admitting that she was wrong.
"Why would anyone believe Yellen's claim that the United States will 'avoid' a recession?" Rep. Lance Gooden, R-Texas, wrote on Twitter in response to Yellen's comments.
Higher inflation rates and concerns about the economy's future coincide with the Federal Reserve's plan to adopt an aggressive monetary policy to attempt to curb high inflation rates by raising interest rates.
Last Wednesday, Jerome Powell, Chair of the Federal Reserve, said that interest rates would have to continue to rise after an initial 0.75% increase.
"The current picture is plain to see, the labor market is extremely tight, and inflation is much too high," Powell said. "Against this backdrop, today, the Federal Open Market Committee increased its interest rate by three-quarters of a percentage point and anticipates that ongoing increases in that rate will be appropriate."