Yellen says 'no plans' to step down as Treasury secretary, sees 'possible' soft landing for US economy

Yellen says ‘no plans’ to step down as Treasury secretary, sees ‘possible’ soft landing for US economy

Treasury Secretary Janet Yellen said Wednesday she had “no plans” to step down from her post amid continued talk of the former Fed chairman’s role in the Biden administration.

Speaking at the New York Times Dealbook Summit in New York, Yellen said: “I am committed to staying [as Treasury Secretary]. I have no intention of leaving.”

Yellen’s comments come after a fall full of speculation over whether there will be a change at the top of the Treasury Department after the midterm elections. Yellen herself went so far as to deny reports of her impending departure in October.

Elsewhere in a wide-ranging conversation with The New York Times’ Andrew Ross Sorkin, Yellen said the US economy would likely be able to achieve a so-called “soft landing”, in which inflation slows without tipping the economy in a deep recession.

“I believe there is a pathway through which a soft landing could occur,” Yellen said. “I believe there are risks on this path, but I think it is certainly possible for us to have a soft landing.”

Fears grew about a “hard landing” for the US economy, where a deep recession would follow the aggressive rate hikes seen by the Federal Reserve this year.

The central bank has raised its benchmark interest rate by a combined 3.25% so far this year, with another 0.50% hike expected next month. Yellen served as Chairman of the Federal Reserve from 2014 to 2018 under Presidents Obama and Trump.

U.S. Treasury Secretary Janet L. Yellen attends the DealBook Summit in New York, U.S., November 30, 2022. REUTERS/David 'Dee' Delgado

U.S. Treasury Secretary Janet L. Yellen attends the DealBook Summit in New York, U.S., November 30, 2022. REUTERS/David ‘Dee’ Delgado

Other economic concerns Yellen responded to were protests in China over zero COVID protocols and the looming threat of a railroad strike in the United States.

Yellen said the lockdowns in China posed a threat to progress in addressing global supply chain imbalances that have “contributed very significantly to inflation”.

“We’ve seen inventory build up, shipping costs come down, and delivery delays go down, so the global and US economy is recovering, and the COVID lockdowns we’ve seen have disrupted production” , Yellen said.

Meanwhile, Yellen also stressed that a railroad strike would be a “major setback” for the US economy, saying the Biden administration was taking steps to ensure it was avoided.

Elsewhere in the conversation, the Treasury Secretary called the Labor Department’s monthly jobs report the most important data point officials watch, along with inflation numbers. The November jobs report is due Friday morning.

“We don’t want to go past full employment, and we have an inflation problem,” Yellen said. “So you can expect growth to slow down, and it has slowed down – we’re still growing and having positive growth, but it’s slowed down significantly.”

“What you see is writing about future growth that has companies rethinking who they really need to hire, so we’ve seen the beginnings of job postings [starting to] fall a bit,” Yellen added. The comments came about an hour before the release of the latest BLS job openings data, which showed there were some 10.3 million jobs available in the United States. United in October, down from 10.7 million the previous month but still well above pre-pandemic records.

Yellen also called the layoffs seen at tech companies an exception, citing “special factors” the industry is facing, including a slowing economy and falling ad revenue.

Yellen also spoke ahead of a much-anticipated appearance by Sam Bankman-Fried, founder and former CEO of deposed cryptocurrency exchange FTX. Yellen pointed to the company’s collapse as the reason for the need to regulate the industry, while saying financial innovation is important and can provide benefits such as easier overseas transactions, if it is used responsibly.

“To the extent that the crypto world could offer faster, cheaper and more secure transactions, we should be open to financial innovation,” Yellen said.

“Having said that, that’s not what it was all about, and I still strongly believe – and [what] everything we’ve been through in the past two weeks and earlier too [says] – it’s an industry that really needs proper regulation, and it doesn’t.

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