Inflation is too high; gas tax holiday worth considering, Janet Yellen says

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Bringing inflation down while keeping the labor market strong “is going to take skill and luck, but I believe that it’s possible” to avoid a recession, U.S. Treasury Secretary Janet Yellen said in an interview on ABC News’ “This Week” program.

“Inflation is really unacceptably high,” Yellen said. Part of the reason is Russia’s invasion of Ukraine are boosting inflation of energy and food costs, she explained. And inflation isn’t just confined to the U.S., she pointed out.

“I do expect in the months ahead, that the pace of inflation is likely to come down, although remember there are so many uncertainties related to global developments.”

Asked whether a federal gas tax holiday is under consideration, Yellen said, “President Biden wants to do anything he possibly can to help consumers; gas prices have risen a great deal and it’s clearly burdening households. So he stands ready to work with Congress and that’s an idea that’s certainly worth considering.” U.S. Treasury Secretary Janet Yellen expects the U.S. economy to slow, but doesn’t see a recession as foregone conclusion, she said

Biden is also reviewing the tariff policy on China, she said. “We all recognize that China engages in a range of unfair trade practices that’s important to address,” Yellen said. Some of the tariffs inherited from the previous administration “serve no strategic purpose and raise costs to consumers. And so reconfiguring some of those tariffs so they make more sense and reduce unnecessary burdens is something that’s under consideration,” she added, but wouldn’t provide any further details on the timing of such efforts.

The economy has been “growing at a very rapid rate, as the economy, as the labor market, has recovered and we have reached full employment,” she said. “It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”

On Thursday, the Dow Jones Industrial Average dropped below 30,000 for the first time in 17 months and the Nasdaq and S&P 500 plunged amid recession fears

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Harry Byrne

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