Despite the U.S. GDP shrinking by 1.4% in the first quarter of 2022, Biden administration Treasury Secretary Janet Yellen says that there is “nothing to suggest” that the United States will enter a recession.
“There’s nothing to suggest that there’s a recession in the works,” she said during an interview at The New York Times’ economic forum.
“Is there a recession risk? Of course there’s a recession risk,” she added. “But is it likely? I don’t think so.”
Yellen’s comments come shortly after she admitted that she had been “wrong” about inflation when she said in 2021 that it was just a “small risk.” Yellen said during an interview with CNN’s Wolf Blitzer that she was incorrect about inflation because of shocks in the economy that she didn’t “fully understand.”
“Well, look, I think I was wrong then about the path that inflation would take,” Yellen said. “As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn’t — at the time didn’t fully understand. But we recognize that now.”
In March 2021, Yellen stated that she believed there was only “a small risk” of inflation and added, “I think it’s manageable.” Additionally, in May 2021, Yellen again said, “I don’t anticipate that inflation is going to be a problem.”
