Janet Yellen says economic recovery depends on supply chain, green agenda and end of war in Ukraine

As the Federal Reserve raises interest rates to the highest levels since the 2008 financial crisis, the White House is trying to find a way to fight inflation without sending the country into a full-blown recession.

“I believe there is a way through,” Treasury Secretary Janet Yellen told the Atlantic on Thursday. “I see a full-scale recession as a period of excessive unemployment. You don’t have a strong labor market. We currently have one of the tightest labor markets.”

Yellen predicts inflation will finally be under control next year.

“There are risks. The Russian invasion of Ukraine is not over yet. We see Putin arming oil and gas,” Yellen said. “We remain vulnerable to supply shocks.”

YELLEN SAYS FED CAN TEMPLATE INFLATION WITHOUT CRUSHING LABOR MARKET

Janet Yellen

Janet Yellen holds a press conference in the US Treasury Department’s Cash Room in Washington, July 28, 2022. (REUTERS/Jonathan Ernst/Reuters Photos)

Yellen keeps an eye on where Russia’s oil reserves will be distributed in the world market as the US tries to bolster its energy capacity.

“Russia is now very actively looking for places to sell their oil. They are giving huge discounts to China and India, which were two big buyers,” Yellen said.

Beijing remains an obstacle in building a clean energy future, despite the bipartisan CHIPS law that encourages greater confidence in domestic semiconductor manufacturing.

“There are rare earth metals, solar panels, battery, electric battery components that we are really too dependent on China for,” Yellen said.

Biden Signs CHIPS Act

President Biden signs the CHIPS and Science Act of 2022 on the South Lawn of the White House in Washington, August 9, 2022. (Demetrius Freeman/The Washington Post via Getty Images/Getty Images)

In order to bring about a smooth transition to clean energy, Yellen says the US must ensure that “communities that have depended on and have depended on fossil fuels are not left behind.”

Biden appropriated a record $360 billion in the Inflation Reduction Act for action against climate change. The White House must now pitch a green energy transition for the entire country.

FEDERAL RESERVE INCREASES INTEREST BY 75 BASIC POINTS FOR THIRD STRAIGHT MONTH

“This is important because I really think it’s contributed to the polarization in the country to have rapid growth, especially the coasts,” Yellen said. “Of course, with house prices rising in these areas, they don’t have it that easy.”

President Joe Biden

President Biden and the White House COVID-19 response team participate in a virtual conversation with the National Governors Association from the South Court Auditorium of the Eisenhower Executive Office Building of the White House complex on December 27, 2021. (Kent Nishimura/Los Angeles Times via Getty Images/Getty Images)

Over the past year, mortgage rates have doubled and the 30-year fixed-rate mortgage is above 6% for the first time since 2008.

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According to new Fox News polls, 78% of voters say inflation has caused financial hardship. Fifty-nine percent of voters are also “extremely” concerned about inflation and higher prices.

As the Federal Reserve warns that Americans will have to weather a rise in unemployment and higher interest rates, it remains to be seen before consumers can feel economic relief.

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