US Treasury Secretary Janet Yellen forecasted a significant reduction in US inflation in 2023, barring an unexpected shock, on Sunday. “I believe you will see much lower inflation by the end of next year if there isn’t an unexpected shock,” she told CBS’ “60 Minutes” in an interview.
The former Federal Reserve chair responded when asked whether a recession was likely: “A recession could happen.” But it isn’t, in my opinion, something that is required to lower inflation.”
Janet Yellen made her statement just days before it is anticipated that the Fed will reduce the swift pace of interest rate increases it has pursued this year. Following four 75-basis point increases this year, Fed Chair Jerome Powell has hinted at a smaller, half-point increase in the policy rate, to a range of 4.25%–4.5%.
Janet Yellen thinks inflation is temporary
According to Janet Yellen, who spoke to CBS, the pace of economic growth has significantly slowed, inflation has decreased, and she is still optimistic about the future of the labour market.
Janet Yellen expressed her hope that the recent spike in inflation would be temporary and claimed that the U.S. government had learned “a lotta lessons” about the need to control inflation following the high prices of the 1970s.
Gas prices at the pump were “way down,” shipping costs had decreased, and lengthy delivery delays had decreased. “I believe that inflation will significantly decline in the coming year,” she predicted.
Musk also talked about the recession
Elon Musk has stated that the US economy is headed for a severe recession. According to him, the Federal Reserve must stop raising interest rates. To stop the downturn from getting worse, though.
Elon Musk has commented on the Fed once again, saying:
If the Fed raises rates again next week, the recession will be greatly amplified
Do you agree?
— Crypto Daily Trade Signals (@cryptodailyTS) December 10, 2022
Similar cautions have been made by Musk for some time. Including in his first email to Twitter staff as the company’s new owner. Fears of a recession have increased this year as a result of the Fed’s active efforts to cool the economy and lower inflation.
Inflation soared to a 40-year high of 9.1% in June. It remained above the Federal Reserve’s target rate of 2% a year at 7.7% in October.
The US central bank increased interest rates in response to the threat. However, increasing them to a range of 3.75% to 4% from almost zero in March. However, signs suggest they could reach a peak above 5% for the first time since 2007.
Also Read: Elon Musk Warns Fed Rate Hike Will Amplify Recession
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