US Treasury Secretary Janet Yellen was optimistic on Tuesday that the United States could avoid a recession in the coming months, due to the good health of the labor market and consumption.
An economic slowdown seems inevitable, he stressed. By contrast, a recession “is simply not compatible with the type of job market that we’re seeing,” Joe Biden’s finance minister said on NPR radio. However, inflation, which is at its highest level in the country since 1981, threatens economic growth because it reduces the purchasing power of households.
Especially since to slow it down, the Central Bank of the United States (Fed) is raising its reference rates, which has the effect of raising the cost of credit for companies and individuals, in order to relieve pressure on prices. At the risk, however, of an economic slowdown. “The Fed will want to achieve a kind of soft landing. It’s going to take skill and luck. Hopefully it can be done,” said Janet Yellen. “There are global risks, and these pose risks to our economy,” she added, like the war in Ukraine or the economic slowdown in China.
Global taxation of multinationals
US gross domestic product (GDP) growth for the second quarter will be released on July 28. Janet Yellen also mentioned the global taxation of multinationals, which had been the subject of an agreement between 137 countries under the auspices of the Organization for Economic Cooperation and Development (OECD) in October 2021, and must now be adapted in the legislation of each country. In the United States, it is a divided Congress that must decide.
“I would say that over time, as other countries pass a minimum, it will push our Congress to pass legislation,” the minister said. Asked about the possibility that it could take several years to achieve this, Janet Yellen admitted that “it is possible, (but) I hope not. I hope that we can adopt this sooner and play a leadership role as more countries comply.” .”
Source: BFM TV
