Consumer slowdown needed; risk of US recession down: Janet Yellen

Viktoria Dendrinou

US Treasury Secretary Janet Yellen sees diminishing risk for the US to fall into recession, and suggested that a slowdown in consumer spending may be the price to pay for finishing the campaign to contain inflation.
 

On the chance of a recession, Yellen said “my odds of it, if anything, have gone down — because look at the resilience of the labor market, and inflation is coming down.” She spoke in an interview with Bloomberg News. “I’m not going to say it’s not a risk, because the Fed is tightening policy,” she said, alluding to the Federal Reserve’s 10 interest-rate hikes since March 2022, with potentially more to come. 
 

 

Spending slowdown
 

“We probably need to see some slowdown in spending in order to get inflation” under control, Yellen said in reference to consumption. The core measure of price increases, which strips out food and energy, “is quite high,” she said.
 

“Inflation has really come down a lot — and there’s more in the pipeline,” Yellen predicted, partly due to an expected adjustment in the housing market.
 

Macron calls for fresh overhaul of global tax system

Emmanuel Macron called at a summit in Paris for another overhaul of the global taxation system to finance the fight against poverty and climate change, building on recent efforts for a minimum levy on corporations.

$1.6 bn healthcare plan launched for developing nations

A €1.5 billion ($1.6 billion) platform to stimulate investment in primary healthcare in developing economies has been launched by a consortium comprised of the African Development Bank, European Investment Bank, Islamic Development Bank and the World Health Organization.
 

It will offer concessional loans and grants and focus on serving the most vulnerable.