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According to Kevin Mahon, president and chief investment officer of Hennion & Walsh Asset Management, the yield curve remains inverted, the highest level in the country since 1955. Every recession since has happened before.
Treasury Secretary Janet Yellen said on Sunday that the United States is experiencing an economic “freeze” but downplayed the potential for a recession, saying the country is in a “transition” period following rapid economic growth.
“The economy is in decline,” Yellen said on NBC News’ “Meet the Press,” adding that a correction is “appropriate” for a healthy economy.
“The job market is very strong right now,” she said. “This is not a recession, we’re in a transition period where growth is slowing down. And that’s important and appropriate, and we need to grow at a steady, sustained pace. So there’s a slowdown.” And businesses can see that, and that’s appropriate, because now people have jobs and we We have a strong job market.
“But now there are no signs – the recession is a broad-based contract that affects many sectors of the economy. But we don’t have that,” she added. I would say we are seeing a slowdown.
Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee on Capitol Hill in Washington, June 8, 2022. (AP Photo/Jose Luis Magaga, File/AP Newsroom)
Yellen went on to say that the “common definition” of a recession is two consecutive quarters of negative GDP, and while economists expect negative growth again after seeing -1.4% last quarter, that doesn’t mean it’s America yet. In failure.
Since the Biden administration called inflation ‘transitory’, the US has seen 13 straight months of higher spending.
“Even if this number is negative, we are not in a recession right now, and we should not describe that as a recession,” she said.
US Treasury Secretary Janet Yellen (C) listens to President Joe Biden during a meeting with corporate CEOs and members of the Cabinet to discuss the federal debt limit in the Eisenhower Executive Auditorium on South Court. (Chip Somodevilla/Getty Images/Getty Images)
NBC anchor Chuck Todd pushed back, saying the writer was “splitting hairs” over the translation.
“I mean, if the technical definition is two-quarters of a contract, you’re saying that’s not a failure,” Todd said.
“That’s not the technical definition,” he argued. “There’s an organization called the National Bureau of Economic Research that looks at a lot of data to determine whether or not there’s a recession, and most of the data you see right now continues to be strong. Even though two quarters of negative growth, the NBER declares this period a recession. We have a very strong labor market. That’s not a failure when you’re creating nearly 400,000 jobs.”
Yellen’s comments come as a former economic adviser to Obama. Larry Summers told CNN. On Sunday, he said “the likelihood of a decline is very high” and “very unlikely” the United States will have a “soft landing”. Last month, Summers warned that a recession was inevitable, perhaps a 75%, 80% chance in the next two years, and there was a real risk that it might come sooner.
President Joe R. Biden speaks with Treasury Secretary Dr. Janet Yellen during a Cabinet meeting in the Cabinet Room. (Sarah Silbinger for The Washington Post via Getty Images/Getty Images)
The United States has experienced 13 straight months of inflation since the Biden administration, including Yellen, dismissed concerns about a rate hike and said the contributing factors were “transient.”
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Yellen admitted in May of this year that “she was wrong about the path of inflation at that time.”
Inflation rose to 9.1% in June, the fastest rate since December 1981.
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