US Treasury Secretary sees path to cool inflation with healthy job market

US TREASURY Secretary Janet Yellen reiterated her optimism about the US economy, saying inflation can slow down without a slump in employment, even if growth cools.

“Our economy has proven more resilient than many had thought,” amid forecasts of recession, Yellen said in excerpts of remarks due to be delivered later on Friday (Jun 30) in New Orleans. “I continue to believe that there is a path to reducing inflation while maintaining a healthy labour market. Without downplaying the significant risks ahead, the evidence that we’ve seen so far suggests that we are on that path.”

Yellen said in an interview last week that she sees diminishing risk for the US to fall into recession, and suggested that a slowdown in consumer spending may be the price to pay for finishing the campaign to contain inflation.

“While there are parts of our economy that are slowing down, households are spending at a robust pace and businesses continue to invest,” Yellen said in the excerpts released by the Treasury Department. “Going forward, I expect the current strength of the labour market and robust household and business balance sheets to serve as a source of economic strength, even if our economy does cool a bit more as inflation falls.” BLOOMBERG