Treasury Secretary Janet Yellen has warned that there could be risks to financial stability in the US. Noting that “inflation is very high, and we are facing serious global constraints,” she stressed that the Treasury is “closely monitoring the financial sector”. As global developments have followed, volatility in the market has increased.”
Janet Yellen warns of financial stability risks in the US
Treasury Secretary Janet Yellen warned about financial stability risks to the US economy in response to questions after her speech at the Securities Industry and Financial Markets Association (SIFMA) annual meeting on Monday.
Citing a “dangerous and unstable environment” for the global economy, including rising energy prices and increasing volatility in financial markets, Yellen warned that in the United States:
Financial stability risks can be physical.
“We are closely monitoring the financial sector, as global developments have increased market volatility,” Yellen said. “To date, the US financial system has not been a source of economic instability. While we continue to watch for emerging risks, our system remains resilient and continues to function well through uncertainties.”
Yellen on the US economy and inflation
Treasury Secretary Janet Yellen also spoke about the US economy and inflation in her speech at the SIFMA annual meeting on Monday. Noting that “the US economy retains significant strength,” she warned:
Inflation remains very high, and we are grappling with severe global adversities.
“Globally growth is slowing down. And energy and food prices have risen, partly driven by Putin’s horrific war in Ukraine and the effects of the pandemic abroad. Climate change continues to devastate communities, leading to increasing energy and food shortages in Europe and around the world,” the Treasury Secretary continued. “We are highly attuned to these risks.”
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