.png)
In an exclusive national interview, Treasury Secretary Janet Yellen forcefully pushed back against increasingly vocal recession alarmists, declaring she sees no credible basis whatsoever for the U.S. to plunge into an economic abyss. Her resolute rebuke of downturn doom-mongering sent an unmistakable message: relentless fearmongering over a severe contraction simply doesn't square with fundamentals.
"I don't see the basis really for a recession in the outlook," Yellen bluntly stated, adding that "I think we have a good strong economy."
The former Fed chair's brazen recessionary reality check came just days after central bank policymakers signaled a potential lone rate cut this year and slower progress towards achieving 2% inflation than previously forecast. But rather than embrace such gloomy sentiment, Yellen adopted a pointedly more optimistic tone - projecting that stubbornly elevated prices would in fact hit the Fed's target as soon as next year, markedly outpacing the Fed's own 2026 timeline.
Her rosier inflation outlook hinges on a pivotal assumption: That the biggest upward pressure on living costs - sky-high shelter expenses from rents and housing - is on the verge of dramatic moderation as rock-bottom rental vacancies get relieved. "Rental prices of new apartments have stabilized in many parts of the country," Yellen asserted, adding her confidence this will soon "reduce costs as more renters renew their contracts."
While hardly pollyannaish about soaring housing affordability pressures, Yellen unveiled modest new policy steps to chip away at the crisis - including $100 million for affordable housing financing over the next three years. But she dismissed the notion of any "silver bullet," stressing instead the need to "use every tool we have" against this intractable issue.
On the touchy subject of when - or even if - the Fed needs to pivot from its aggressive rate-hike campaign and finally start lowering borrowing costs, the Treasury chief adopted a tactfully noncommittal stance. She carefully avoided any overt speculation on the timing of potential easing, insisting that decision "depends on what the data show policymakers."
Still, Yellen's overall tone made clear where her sympathies lie: for a central bank extremely wary of over-tightening into an unnecessary downturn that could be avoided with prudence and patience. "They certainly don't want to cause a recession when it's unnecessary," she noted, framing overshooting as the greater danger compared to the Fed's recent overly rosy rhetoric around the "immaculate disinflation" it's now abandoned.
Beyond discounting recessionary risks on the horizon, Yellen took the opportunity to push back firmly against criticism of the Biden administration's economic stewardship - particularly over its failure to rein in mushrooming federal deficits. Taking direct aim at the 2017 Tax Cuts and Jobs Act under former President Trump, she slammed that legislation's corporate tax cuts as fiscally ruinous giveaways which "promised an investment boom that really did not materialize."
You'll never guess who they could make President next
Most Americans are overlooking the seemingly impossible candidate that should worry you. It's not Biden… Trump… Newsom… or even Michelle. It's someone even worse.New evidence of a secret plan indicates he could soon return, and finish what he started.
Get the full story right here.
Instead, the former Fed chair touted President Biden's budget proposals as a far more responsible path - projecting an ambitious $3 trillion of deficit reduction over the coming decade would be sufficient to stabilize America's troubling debt-to-GDP ratio at around 100% of economic output. While conceding that today's elevated interest rate burden is already straining government finances, Yellen insisted the current load remains "at normal historical levels" - so long as credible debt-reduction efforts proceed.
By fearlessly confronting economic bogeyman from runaway inflation to existential deficits, all while dismissing talk of an imminent downturn as pure fantasy, Yellen has drawn a bright line against the gloom-and-doomers. With her full-throated defense of how far the nation has come just years removed from the Covid crisis and a roadmap for optimistically navigating persistent challenges ahead, the former academic economist has issued a bravura performance befitting of an elder stateswoman of the dismal science.
