Biden predicts that US 'will not go into recession'

US Treasury Secretary Janet Yellen expresses confidence in Federal Reserve's response to US economic changes

The Financial District of Manhattan in New York City. AFP
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President Joe Biden said on Monday that he did not expect the US to go into recession, although GDP figures due this week may show the economy shrinking for a second consecutive quarter.

"We're not going to be in a recession, in my view," Mr Biden said.

Quoting strong employment figures, he said he hoped instead for a soft landing where "we go from this rapid growth to steady growth".

US Treasury Secretary Janet Yellen expressed confidence in the US Federal Reserve’s fight against inflation and said she did not see any sign that the country's economy was in a broad recession.

“We’re likely to see some slowing of job creation,” Ms Yellen told NBC on Sunday. “I don’t think that that’s a recession.

"A recession is broad-based weakness in the economy. We’re not seeing that now.”

With US consumer prices rising at the fastest rate in four decades, a growing number of analysts say it will take a recession and higher joblessness to ease price pressures significantly.

The Fed increased rates in June by the most since 1994 and is expected to approve another rise, of 75-basis points, this week.

Inflation is “way too high”, Ms Yellen said, while repeating the Biden administration’s comments that it is also high in many other advanced economies.

“The Fed is charged with putting in place policies that will bring inflation down,” said the former Fed chairwoman. “And I expect them to be successful.”

Even if the US posts two consecutive quarters of economic contraction, Ms Yellen — pointing to the US job market — said she did not expect the academics at the National Bureau of Economic Research who rule on recessions would call one.

News agencies contributed to this report

Updated: July 25, 2022, 9:09 PM
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