Treasury Chief Yellen Walks Back Claim US Economy Could ‘Overheat’ This Summer

As vaccination rates steadily increase in several parts of the globe, economists have made increasingly optimistic economic growth predictions, with the latest saying the US economy could grow 7.6% in 2021, the steepest pace it’s seen since 1951, and similar predictions being made for China.

Treasury Secretary Janet Yellen was forced to walk back comments on Tuesday about the potential for interest rates to rise later this year after the stock market reacted poorly to the news.

“It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive [and] I think that our economy will grow faster because of them,” she added.

Yellen said she expected the programs to make a “big difference” in inequality in the country.

Although the first two months of 2021 were among the most grim of the pandemic, with more than 150,000 people dying of COVID-19 in just a couple of weeks, the economy quickly began to recover, and gross domestic product had jumped by 6.4% by the end of the first quarter. Yields on long-term Treasury bonds have also risen, as has the consumer price index.

That’s why, later on Tuesday, the Treasury chief told the Wall Street Journal’s CEO Council Summit: “I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address it.” 

Sourse: sputniknews.com