By Susan Heavey and David Lawder
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen stated on Thursday that labor market and inflation knowledge counsel the U.S. economic system is on a path to a “tender touchdown,” however the “final mile” on taming inflation is bringing down housing prices.
Yellen informed CNBC in a reside interview that primarily based on feedback from Federal Reserve officers, the U.S. central financial institution’s benchmark in a single day rate of interest will proceed to say no to a impartial coverage degree.
“I all the time believed that there was a path to a tender touchdown, that it was attainable to deliver inflation down whereas sustaining a robust labor market, and to me, that is what the information suggests has occurred,” Yellen stated.
She added that there was cause to imagine that housing prices would additionally fall.
Yellen additionally stated that U.S. deficit discount was essential to maintain curiosity prices manageable over time, however added that the Biden administration believed it vital to proceed to put money into components of the economic system that will gasoline future progress.
Relating to monetary system stability, Yellen stated banks have been well-capitalized, however after turbulence over uninsured deposits erupted in 2023 that prompted deposit runs in some banks, “a great deal of thought goes into the right way to shore up the liquidity, the entry to the Fed’s low cost window for banks that do have uninsured deposits.”
She stated any adjustments to the bounds on financial institution deposit insurance coverage have been choices for Congress to make, however banking regulators have been discussing methods to shore up fast entry to liquidity when wanted.
