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Recession ‘Not Completely Off the Table,’ Treasury Secretary Janet Yellen Says

Treasury Secretary Janet Yellen said on Sunday that a recession is “not completely off the table” for the United States, even as the economy remains strong.

Yellen’s comments come after a recent slowdown in economic growth as well as rising inflation. The Federal Reserve is expected to continue raising interest rates in an effort to combat inflation, which could lead to a slowdown in economic activity.

“It’s not completely off the table,” Yellen said in an interview with CBS’ “Face the Nation.” “But we would expect, with the job market as strong as it is now, to see a slower pace of ongoing job gains.”

Yellen made the comments in an interview with CBS’ “Face the Nation” after the release of the June jobs report, which showed that the economy added 209,000 jobs, below expectations.

Yellen said that the economy is still “in a very strong position,” but that the risks are rising. “We’re seeing some slowing in growth,” she said. “And we’re also seeing some risks to inflation from abroad.”

The risks to inflation include the war in Ukraine, which has led to higher energy prices, and the ongoing COVID-19 pandemic, which has disrupted supply chains.

Yellen said that the Federal Reserve is “taking the necessary steps” to address inflation, but that it’s “not going to be easy.”

“We’re going to need to raise interest rates to a level that’s going to slow growth,” she said. “But we’re also going to need to be careful not to raise them so high that we cause a recession.”

Yellen’s comments come as economists are increasingly divided on the likelihood of a recession. Some economists believe that the economy is already in a recession, while others believe that a recession is still avoidable.

The Federal Reserve is expected to raise interest rates by another 0.75 percentage points at its meeting later this month. This would be the third consecutive rate hike of that size.

The Fed is hoping that by raising interest rates, it can slow the economy enough to bring inflation under control without causing a recession. However, there is no guarantee that the Fed will be able to achieve this delicate balance.

If the Fed raises interest rates too much, it could lead to a recession. However, if the Fed doesn’t raise interest rates enough, it could allow inflation to continue to rise, which could also lead to a recession.

The next few months will be critical for the U.S. economy. The Federal Reserve will need to carefully balance the risks of inflation and recession as it sets monetary policy. If the Fed gets it right, the economy will avoid a recession and inflation will come under control. However, if the Fed gets it wrong, the economy could enter a recession.

What You Can Do

There are a few things that you can do to prepare for a potential recession. First, you should make sure that you have a financial cushion in case you lose your job. This means having enough money saved up to cover your expenses for at least three months.

Second, you should review your budget and make sure that you are not overspending. This will help you make sure that you can weather any financial storms that come your way.

Third, you should consider diversifying your investments. This means investing in a variety of assets, such as stocks, bonds, and real estate. This will help protect your money from market volatility.

Finally, you should stay informed about the economy. This will help you make informed decisions about your finances and prepare for any potential changes.

Conclusion

The risk of a recession is rising in the United States. The economy is facing a number of headwinds, including rising inflation and interest rates. The Fed is trying to bring down inflation, but its efforts could lead to a sharp slowdown in economic growth.

There are a number of things that can be done to prevent a recession, but there is no guarantee that these measures will be successful. The economy is a complex system, and it is difficult to predict how it will respond to changes in policy.

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