Yellen is optimistic about US economy but sluggish China recovery still poses some risk
ALBAWABA – United States (US) Treasury Secretary Janet Yellen is optimistic about US economy and growth outlooks despite high inflation and risks arising from sluggish China recovery and the Ukraine war, news agencies reported Tuesday.
In the swing state of Nevada on Monday, Yellen said that President Joe Biden's policies are powering historic job growth and rebuilding competitiveness. Even though Reuters reported polls showing that American remain sceptical of the effectiveness of Biden’s policies.
Speaking at a union hall near the Las Vegas strip, Yellen said that "Americans are beginning to see in their daily lives the impact of that, but there's a lot more coming down the pike," according to Reuters.
Although many Americans do not share her optimism on the broader economy, Yellen highlighted that the polls already showed a large share of Americans feeling good about their personal situation.
Yellen said China's slowing growth, Russia's war in Ukraine and climate change could still pose risks to the US economy and did not rule out a recession, but she felt upbeat.
"I feel very good about US prospects overall," Yellen told reporters.
She noted that inflation and the unemployment rate had both dropped below 4% and that the US economy was continuing to expand.
Although Yellen is optimistic about US economy prospects, she did refer to China’s economic woes being a “risk factor” for the US.
“China’s slowdown will have the largest impact on its Asian neighbors, but there will be some spillovers to the United States,” Yellen told reporters Monday, according to Bloomberg.
Yellen is optimistic about US economy, IRA promises benefits for taxpayers by year’s end
For the US, she said, “We’re seeing a slowdown in growth, but growth that remains healthy, a job market that is very strong and inflation that [is] coming down.”
Earlier, on August 11, President Joe Biden described China’s economic problems as a “ticking time bomb” and referred to Communist Party leaders as “bad folks”.
Speaking at a political fundraiser, Biden said China was in “trouble” because its growth had slowed and its unemployment rates has soared.
So far, the US economy has outrun recession warnings with record-low unemployment, strong wage gains and better-than-expected GDP growth. But many voters who backed Biden in 2020 think the economy has fared poorly, and may not vote for him in the 2024 election, a recent Reuters/Ipsos poll showed.
Yellen said one of the goals of the climate-focused Inflation Reduction Act (IRA), which includes $500 billion in new spending and tax breaks, was to build a diversified clean-energy supply chain. It also aims to "reduce chokepoints, mitigate disruptions, and protect our economic security," the secretary noted.
The full impact of the act won't be known until the end of the year when taxpayers claim their tax credits. But a Treasury official said the private sector has announced over $110 billion in new clean-energy investments since the bill's passage a year ago, Reuters reported.
