Washington D.C., (Business News Report) – US Treasury Department Secretary, Janet Yellen, presented an optimistic view of the US economy future, with regard to inflation and growth rate.
Yellen has painted a rosy outlook for the US economy, seeing fading inflation and higher long-term growth potential.
“Inflation is a valid policy concern,” she noted.
“Despite these challenges, it’s important to note that professional forecasters think that inflation will substantially abate next year,” she said.
US economy future
Yellen described the US labor market as “exceptionally strong” and called a forecast of 3.3% growth in 2022 “stunning economic and policy achievement.”
The Secretary’s comments contrast with the general feeling prevailing in the United States that the economy is heading in the wrong direction, amid fears that high inflation will continue to devour the purchasing power of families.
Although growth and employment rebounded strongly after the crash in early 2020 at the start of the coronavirus pandemic, inflation has jumped to its highest level in nearly 40 years.
Consumer prices rose by 7% in 2021, the largest jump in 12 months since 1982, driven by supply restrictions linked to the pandemic and government stimulus aimed at supporting families and companies to overcome the economic repercussions.
President Joe Biden saw his approval ratings decline amid public dissatisfaction with the state of the economy.
A recent CBS News poll showed that his assessment of the US economy was 38%, and two-thirds of Americans believe that the president does not focus enough on the burden of inflation.
Meanwhile, the University of Michigan Consumer Sentiment Index hit its lowest level in November in nearly a decade.
Yellen argued that the Biden administration was seeking to promote long-term economic growth by implementing so-called “modern supply side economics,” which would emphasize public investment in infrastructure and the workforce, and seek to protect the environment.
“We have a clear path forward with the recently passed infrastructure package and the proposed Build Back Better plan,” she said, referring to the 10-year spending plan now pending in the Senate.
“Together these policies will promote a modern supply side expansion that boosts long-term sustainable growth,” she said.
She also reiterated her view that although government debt has historically been high relative to GDP, low interest rates mean that the “financial burden can be controlled.”