Yellen: U.S. Economy 'Doing Very Well' But 'We're Going to See and Can't Be Sure' on Recession in 6-9 Months

During an interview with CNBC released on Tuesday, Treasury Secretary Janet Yellen stated that she thinks the United States economy “is doing very well” even though inflation “is too high.” And responded to JP Morgan Chase CEO Jamie Dimon’s prediction of a recession in the next six to nine months by stating that “we’re going to see and can’t be sure.” But she still believes the economy is doing well.

Yellen said, “I think the United States is doing very well. And we had an employment report just last Friday that shows we continue to have a very resilient economy, an economy, of course, that’s slowing. Which is something we expected fully after a very strong recovery. We essentially erased the shortfall in output from its potential. The ARP (American Rescue Plan) accomplished that. We would expect slower growth. But we still had over 260,000 jobs last month and have a very strong job market, although we’re beginning to see some signs that pressures in the labor market are easing. So, I remain encouraged. The U.S. economy is strong. And, as I’ve said on other occasions, I think there’s a path through. Obviously, inflation is too high. It’s a priority to lower it. But I think there’s a path to accomplish that while maintaining a healthy labor market.”

Host Sara Eisen then asked, “Is the U.S. really strong right now, economically? The stock market has gotten crushed. So have U.S. bonds. The CEO of the biggest bank, JP Morgan, Jamie Dimon, told us this week that he expects a U.S. recession in the next six to nine months.”

Yellen responded, “Well, look, we’re going to see and can’t be sure. But I’m very encouraged by a continued strong labor market. People feel good about the labor market. They’re, of course, concerned about inflation and we need to bring that down. But household balance sheets remain strong. Firms, even with rising interest rates, have debt burdens that are, by and large, manageable. And while there’s been a good deal of financial market volatility and some concerns about liquidity and the potential for liquidity strains in the Treasury market, we really haven’t seen signs of financial [instability] in the United States in our financial markets. They continue to function well and we’re not seeing signs of deleveraging of the kind that sometimes occurs in an environment of tighter monetary policy. So, I think the U.S. economy continues to do well.”

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