According to US Treasury Secretary Janet Yellen, inflation is still too high, but on the way back to normal levels. ‘I would say: so far it’s going well.’ According to Yellen, the Federal Reserve’s measures to reduce inflation while maintaining a strong labor market appear feasible.
‘Of course there are risks, and the global situation we face is very uncertain,’ says Yellen (1946). Inflation is still too high. But if you look at the past year, inflation is coming down. And I know the Fed is committed to continuing the process of returning it to more normal levels. I believe they will succeed.’
That is what the former Fed chairman says in conversation with CNN during an unexpected visit to Ukraine. In the capital, Kiev, Yellen (b. 1946) speaks with, among others, the Ukrainian president Volodimir Zelensky about American support for Ukraine. The United States is transferring 1.2 billion dollars (1.1 billion euros) of budget support to Ukraine.
Yellen stressed that an effective government is indispensable for Ukraine. The money should help keep essential government services, such as education or the fire service, running. In total, according to Yellen, the US government provided nearly $50 billion in aid to Ukraine last year. “We will push for more action from our allies and partners,” she added.
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Russian economy
Yellen expects the Russian economy to soon feel the effects of the series of sanctions imposed by the United States and the European Union. If foreign investment continues to decline, Russia will quickly run out of reserves, she thinks. “We will see that Russia will pay a greater toll in the near future,” which also threatens military strength, Yellen thinks. China’s attempts to invest more in Russia could have “serious” consequences, she said.
“We will not tolerate sanctions violations,” she said. And we’ve been very clear. If the Chinese government and Chinese companies or financial institutions violate those sanctions, the consequences will be very serious.”
End war
At the G20 summit in Bangalore, India, Yellen said an end to the war in Ukraine is “most important” for the global economy. “This war is having the most devastating effects in Ukraine, but by using food and energy as a weapon, Putin has also harmed emerging countries and created global economic headwinds that have hit every country.”
