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Janet Yellen says US economy will slow but avoid recession – while gas prices unlikely to drop soon

Business Insider US
US Treasury Secretary Janet Yellen. Drew Angerer/Getty Images
US Treasury Secretary Janet Yellen. Drew Angerer/Getty Images
  • The US will avoid a recession but the economy will slow, Treasury Secretary Janet Yellen said.
  • She remained optimistic on consumer spending, a strong labour market, and investment.
  • Yellen added that she doesn't see record-high gas prices falling in the near future.
  • For more stories go to www.BusinessInsider.co.za.

Treasury Secretary Janet Yellen doesn't think the US economy will fall into a recession but warned gas prices won't fall from record-highs in the near future. 

She also said at a New York Times DealBook event on Thursday that economic growth will cool off as the Federal Reserve tightens monetary policy. 

"I don't think we're [going to] have a recession. Consumer spending is very strong. Investment spending is solid," Yellen said on Thursday.

Yellen's comments preceded another climb in inflation on Friday, with the US consumer price index climbing 8.6% year over year in May, the highest rate since 1981.

A key factor in inflation has been rising fuel costs, and the average gallon of gas in the US has climbed to a record high of $5, according to GasBuddy. Meanwhile, AAA data shows the national average on Friday is $4.986, but is expected to follow GasBuddy data and tick above the $5 mark soon too. 

Yellen said US President Biden had done all he can do thus far to tame skyrocketing gas prices, pointing to record inventory drawdowns from the Strategic Petroleum Reserve.

But she acknowledged that prices probably won't fall in the near term and that Americans are worried about the costs of filling up their cars.

"It's unlikely that gas prices are going to fall anytime soon," Yellen said.


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