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U.S. economy is ‘doing well’ amid global economic uncertainty, says Treasury Secretary Janet Yellen

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US Treasury Secretary Janet Yellen during an armchair discussion at the Rotman School of Management in Toronto, Ontario, Canada on Monday, June 20, 2022.
Cole Burston | Bloomberg | Getty Images

Treasury Secretary Janet Yellen said Tuesday that the U.S. economy was “doing very well” as rising energy prices, Covid-19 variants and Russia’s war with Ukraine have caught global markets in a vice grip.

“From the perspective of the United States, I think the United States is doing very well,” Yellen told CNBC’s Sara Eisen Tuesday. The Treasury Secretary is meeting with world finance leaders at the International Monetary Fund and World Bank’s annual meetings this week in Washington, D.C.

She said the economy was expected to slow after a very strong recovery, but a recent jobs report released last week revealed a “very resilient” economy.

Yellen acknowledged that inflation is too high and that lowering it is a priority for the Biden administration. But she said there is a way to do that while maintaining a healthy labor market.

“Firms, even with rising interest rates, have debt burdens that are by and large manageable,” Yellen said. She added that U.S. financial markets continue to function well and the Treasury is not seeing signs of deleveraging that generally happens in an environment of tighter monetary policy.

Yellen also said the OPEC+ decision to reduce oil output and Russia’s continued war against Ukraine have also affected liquidity in the markets, but there are no signs that merit serious concern. Worries about the strength of the U.S. dollar are also a natural result of different paces of monetary tightening in the U.S. and other countries, she said.

“The dollar is a safe haven, so when times are uncertain, we experience capital inflows into our safe markets,” Yellen said. “And all of those things are pushing up the dollar vis a vis a broad range of countries.”

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