WASHINGTON (AP) — Treasury Secretary Janet Yellen mentioned Thursday the world pandemic and Russia’s invasion of Ukraine spotlight the risk of huge financial shocks in the future, including that downturns are “likely to continue to challenge the economy.”
Her tackle at the Brookings Institution checked out classes realized from financial downturns of the previous and mentioned international locations want to construct in “recession remedies” to shield individuals in the U.S. and globally going ahead.
With “large negative shocks” inevitable, she mentioned, policymakers have realized from the Great Recession that it is crucial to exit financial downturns “as quickly as possible.”
“Countries will fare better if their economies are more resilient and less fragile,” she mentioned. “Improved understanding of breaks in supply chains, increases in commodity prices, bursting of asset bubbles, and labor and productivity shocks can help policymakers implement reforms that bolster our economic resilience.”
The previous a number of years have been marked by a worldwide pandemic that prompted each the Trump and Biden administrations to subject trillions of {dollars} in federal stimulus support, which economists say contributed to inflation ranges at their highest factors in 4 many years. And now the warfare in Ukraine has had main impacts on world power and meals costs, together with different commodities.
The Conference Board’s shopper confidence index edged down barely in April.
Yellen known as for more everlasting housing security help for renters and householders and applauded latest enhancements to the unemployment insurance coverage system and stimulus funds, stressing the significance of U.S. “recovery policies that shorten the duration of recessions and mitigate economic pain.”
She promoted Biden administration efforts to cut back U.S. reliance on fossil fuels and push for better power independence.
“These shifts will mitigate our future vulnerability to oil price shocks,” she mentioned. “At the same time, they will abet the transition to cleaner energy sources which will, in due course, lessen the risks tied to natural disasters and climate change.”