Amid Rising Recession Concerns... US Senior Officials Repeatedly Say "Recession Can Be Avoided"

Janet Yellen, U.S. Secretary of the Treasury
Photo by AP Yonhap News

[Asia Economy New York=Special Correspondent Seulgina Jo] Amid rising concerns about a recession due to tightening measures to curb high inflation, officials from the Joe Biden U.S. administration collectively delivered messages on the 19th (local time) that a recession can be avoided. They emphasized the strength of the U.S. economic fundamentals, citing recent economic indicators.

Janet Yellen, U.S. Treasury Secretary, appeared on ABC News that day and stated, "The economy is expected to transition into a stable growth phase and slow down," adding, "A recession is not inevitable." Regarding the U.S. inflation, which recently reached its highest level in 41 years, she said, "It is an unacceptably high level," but also predicted, "The labor market is the strongest since World War II. Inflation will soon slow down."

Secretary Yellen also reiterated that the Biden administration is reviewing some tariffs on China as part of its inflation response. She argued, "Some of the tariff policies inherited from the Donald Trump administration do not contribute at all to strategic objectives but only raise consumer prices."

Additionally, concerning soaring gasoline and other oil prices, she mentioned that temporarily exempting fuel taxes is worth fully considering.

Brian Deese, Chairman of the White House National Economic Council (NEC) and economic advisor to President Biden, also appeared on CBS and Fox News, drawing a line on the possibility of a recession. Deese said, "Inflation is unacceptably high," but added, "That is why President Biden has made this issue the top economic priority and instructed to do everything possible to lower prices."

He stated, "With the unemployment rate at 3.6%, the labor market is the best since World War II, and the balance sheets of households hit by COVID-19 and other factors have recovered over the past year," adding, "Many seem to underestimate the strengths and resilience of the U.S. economy." This is a claim that the current economic fundamentals of the U.S. are solid.

Furthermore, Deese argued that cooperation with Congress is necessary to pass legislation to reduce inflation, mentioning possible legislative measures such as lowering prescription drug prices, reducing costs for gas and electricity through energy incentives, and cutting the federal deficit through tax reform.

He emphasized, "This will not only help lower inflation but also send a strong signal to the markets and the global economy that the U.S. is very serious about price stability."

These remarks from senior administration officials align with President Biden’s recent interview with the Associated Press, where he said, "A recession is not inevitable. We are in a stronger position than any other country in the world to overcome inflation." At that time, he rebutted the blame surrounding inflation by asking, "If it’s my fault, then why do other major countries have higher inflation?" He also pointed fingers at Russia, which invaded Ukraine, and oil companies profiting from rising oil prices.

Meanwhile, U.S. economists foresee nearly a 50% chance of a recession within a year. According to a recent survey by The Wall Street Journal (WSJ) of 53 economists, the average probability of a recession occurring within 12 months was 44%. This figure is significantly higher than the 38% recorded in December 2007, when the global financial crisis began, and the 26% in February 2020, just before the COVID-19 outbreak.

This content was produced with the assistance of AI translation services.