Yellen sees no weakness in US economy, even with global growth dented

[WASHINGTON] Treasury Secretary Janet Yellen said she expects the US economy to remain resilient even as higher energy and commodity costs, triggered by Russia's invasion of Ukraine, dent the outlook for global growth.

"We have an immensely strong job market," Yellen said when asked in a CNBC interview on Friday about signs of weakness in the US economy.

"When you look at the balance sheet of the typical American family, it is in very good shape. Consumer spending is strong and tax revenues have frankly been surprising to the upside."

The Treasury chief said she's "concerned about spillovers" to other countries, particularly those dependent on wheat imports. The rise in energy prices and other goods, she said, is "likely reduce prospects for global growth over the next year." On the impact of higher energy prices, she pointed out the US is a net exporter, and so the effect will be mixed.

"Oil prices obviously impose significant burdens on American families, but it's also likely to, on balance, be offset in the impact on spending by faster drilling expenditures," she said.

Yellen separately said that it was not time to sanction China over its partnership with Russia. President Joe Biden has warned Beijing of unspecified consequences if China supports Russia, either militarily or by helping it avoid the impact of sanctions.

"I don't think that that's necessary or appropriate at this point," Yellen said of sanctions. "We would be very concerned if they were to supply weapons to Russia, or try to evade the sanctions that we've put in place on the Russian financial system and the central bank. We don't see that happening at this point." BLOOMBERG

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