UNITED STATES NEWS

Recession not inevitable, gas tax holiday weighed, Yellen says

Jun 19, 2022, 12:00 PM

REHOBOTH BEACH, Del. (AP) — Treasury Secretary Janet Yellen said Sunday that she expects the U.S. economy to slow in the months ahead, but that a recession is not inevitable.

Yellen offered a dose of optimism even as economists grow increasingly worried about a recession fueled by skyrocketing inflation and the Russian invasion of Ukraine.

She also expressed an openness, during an interview on ABC’s “This Week,” to a federal gas tax holiday to help give motorists some relief at the pump. Several lawmakers have floated the idea as the average price of gasoline hovers around $5 per gallon; the tax is 18.4 cents per gallon.

“That’s an idea that’s certainly worth considering,” Yellen said when asked if the administration is weighing it. She added that President Joe Biden wants “to do anything he possibly can to help consumers.” And Energy Secretary Jennifer Granholm said “it’s one of the tools,” but told CNN’s “State of the Union” that “part of the challenge with the gas tax, of course, is that it funds the roads.”

Yellen said overall consumer spending in the United States remains strong, while noting that spending patterns are changing, given the impact of rising food and energy prices. Yellen said household savings during the coronavirus pandemic will help sustain spending.

The national saving rate has fallen to about 6%, below pre-pandemic levels, after reaching 16.6% in 2020, the highest on record dating to 1948, and 12.7% in 2021.

“I expect the economy to slow,” Yellen said. “It’s been growing at a very rapid rate and the economy has recovered and we have achieved full employment. We expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”

Yellen echoed Biden’s optimism in the face of economic headwinds. Biden in an interview with The Associated Press last week insisted that a recession is “not inevitable” and made the case that U.S. is “in a stronger position than any nation in the world to overcome this inflation.”

Disagreeing with the assessment from Biden and Yellen, former Treasury Secretary Larry Summers told NBC’s “Meet the Press” that in his estimation, “the dominant probability would be that by the end of next year we would be seeing a recession in the American economy.”

The Federal Reserve on Wednesday approved its largest interest rate increase in more than a quarter-century to stem a surge in inflation. The move raised the target federal funds rate by three-quarters of a percentage point to a range of between 1.5% and 1.75%

The tightening of monetary policy was accompanied by a downgrade to the Fed’s economic outlook, with the economy now seen slowing to a below-trend 1.7% rate of growth this year, unemployment rising to 3.7% by the end of this year and continuing to rise to 4.1% through 2024.

Yellen said it will take “skill and luck” to bring down inflation while maintaining low unemployment.

“I believe it’s possible,” she said.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

United States News

Associated Press

Defense secretary tells US Naval Academy graduates they will lead ‘through tension and uncertainty’

ANNAPOLIS, Md. (AP) — Defense Secretary Lloyd Austin told U.S. Naval Academy graduates Friday that they will be leading future sailors and Marines “through tension and uncertainty,” noting how two graduates from last year were just aboard the USS Carney in the Red Sea, where they helped shoot down missiles and drones. The Navy has […]

50 minutes ago

Associated Press

American soldier arrested in Russia over an alleged theft will remain in custody, state media report

An American soldier arrested in Russia’s far eastern city of Vladivostok on charges of stealing lost an appeal against his detention and will remain in custody, Russian state news agency RIA Novosti reported Friday, citing court officials. The soldier, identified by court officials as Gordon Black, will remain in custody at least until July 2, […]

4 hours ago

Associated Press

Stock market today: Wall Street futures up, but on track for first losing week in a month

Wall Street rose to modest gains before the open Friday as markets try to claw back some of this week’s losses. Futures for the S&P 500 rose 0.3% before the bell, while futures for the Dow ticked up 0.1%. A flurry of mixed results this week from big U.S. retailers effectively signals the end of […]

10 hours ago

Associated Press

More severe weather forecast in Midwest as Iowa residents clean up tornado damage

GREENFIELD, Iowa (AP) — The skies were blue and the wind was blowing as residents of the small city of Greenfield, Iowa, worked to clean up two days after a destructive tornado ripped apart more than 100 homes in just one minute, took the lives of four residents and injured at least 35 more. All […]

12 hours ago

Associated Press

Hunter Biden arrives at court for a final hearing before his June 3 gun trial

WILMINGTON, Del. (AP) — Hunter Biden is back in court on Friday for the final hearing before he’s expected to stand trial on federal firearms charges in Delaware as his father’s reelection campaign unfolds. President Joe Biden’s son didn’t speak to reporters as he followed his lawyers into the Wilmington courthouse. He’s charged with lying […]

13 hours ago

Arizona doctors California abortions...

Associated Press

Arizona doctors can come to California to perform abortions under new law signed by Gov. Newsom

Arizona doctors can temporarily come to California to perform abortions for their patients under a new law signed by Gov. Gavin Newsom.

15 hours ago

Sponsored Articles

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

...

DESERT INSTITUTE FOR SPINE CARE

Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.

...

COLLINS COMFORT MASTERS

Here are 5 things Arizona residents need to know about their HVAC system

It's warming back up in the Valley, which means it's time to think about your air conditioning system's preparedness for summer.

Recession not inevitable, gas tax holiday weighed, Yellen says