Treasury Secretary Janet Yellen on Monday said she sees the possibility of “significantly” easing inflation in the U.S. economy, even as the government deals with the ramifications of reaching its borrowing limit and as economists worry about a potential recession.
“You don’t have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years. What I see is a path in which inflation is declining significantly, and the economy is remaining strong,” Yellen said on ABC’s “Good Morning America” when asked if she thinks a recession is likely.
“And really, that path, I believe, is possible. And it’s what I’m hoping we will be able to achieve,” she said.
The Federal Reserve has been upping interest rates in an effort to tamp down sky-high inflation, which has since appeared to cool.
But Yellen has said she’s concerned the country could fall into a recession if lawmakers don’t take action to address the debt limit.
The U.S. hit its borrowing maximum of around $31.4 trillion in January, and the Treasury Department has since been using what it has described at “extraordinary measures” to help the government pay its bills, a fix expected to last until sometime this summer.
But with lawmakers stuck in talks regarding whether to lift the debt ceiling, Yellen said last month that she’s “nervous” that a default on the debt could trigger a “financial crisis” and push the U.S. into a recession.