US Treasury Secretary: "US Economy Strong... Some Impact Expected from Sanctions on Russia"

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] U.S. Treasury Secretary Janet Yellen said on the 11th (local time) that the U.S. economy is strong but inflation is a problem, and there will be ripple effects from sanctions against Russia, according to Reuters.

Secretary Janet made these remarks during a speech at a social welfare institution in Denver, Colorado, marking the first anniversary of the American Rescue Plan (ARP).

She said that while monetary tightening policies to fight inflation could cause a recession, she is confident in the Federal Reserve's (Fed) ability to balance these measures.

Secretary Janet also mentioned the sharp rise in energy prices, stating, "Our world is interconnected, and our ambition to make Russia pay a high price for its unjustified invasion has already affected us."

She added, "Because our economy is historically strong, the U.S. will be able to handle these turbulent times well," explaining, "Thanks to the ARP and the resilience of the American people, the U.S. economy is historically strong."

In a Q&A session with reporters after the speech, she expressed the view that sanctions against Russia do not pose a risk of the U.S. dollar losing its status as the dominant reserve currency.

Earlier, some market participants pointed out that blocking Russia's access to foreign currency reserves could drive other countries away from the dollar.

Secretary Janet said, according to Bloomberg, "I do not think the dollar is facing severe competition, nor do I think it will for a long time."

She added, "When you think about what makes the dollar a reserve currency, it is because we have deeper and more liquid capital markets than any other country on earth," and "Treasury securities are safe and highly liquid. Our economic and financial systems and rule of law work well, and there is no comparable currency as a reserve currency."

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