Janet Yellen predicts a bleak future for the US economy

However, the Treasury Secretary ruled out any signs of recession in October. Three months later, it is revising its positions on this issue. We explain the reasons to you.

Fear of an economic recession in the United States

In August, Jerome Powell, the head of the Fed, declared that “ the american economy is in recession “. An opinion that the CEO of JP Morgan shared a few months later. He even proposed setting up a blockchain-based payment solution to fix it.

Janet Yellen fears the worst for the US economy

Janet Yellen, Secretary of the Treasury, says the US economy is at risk of entering a recession. »

In an interview given to BloombergTreasury Secretary Janet Yellen said she doesn’t want ” minimize the risk of recession “. Admittedly, the FED has raised its key rate on many occasions, resulting in fine statistics concerning inflation and employment. But, for Ms. Yellen, the economic downturn is definitely here.

Indeed, Janet Yellen admits not finding “ real outcome, unraveling of economic activity », despite:

  • the growth of the US economy at a rate of 2.9% in the fourth quarter of 2022;
  • the increase in the personal consumption rate of 2.1%;
  • the 0.8% increase in consumer and business spending;
  • etc

All this does not bode well in the eyes of the great American financier. For her, there is a 65% chance that a recession will occur in the near future.

There is no question of minimizing this risk

Janet Yellen, Elon Musk and other alarmed personalities

The Federal Reserve’s repetitive rate hikes also worry Elon Musk. Because there were about 4 increases of 75 basis points, and another at 50 basis points.

The Tesla boss has never stopped warning the FED of inflation risks because of his anti-inflation solution. More foreseeing than the other bosses of American companies concerning the difficulties to come, the billionaire will opt for the reduction of the costs in his production sites of electric cars.

For his part, Jamie Dimon predicts a 5% overrun in interest rates. Inflation is still very high.

Will the recession have an impact on the cryptocurrency market? Some analysts believe so. Moreover, the crises experienced by the major crypto exchanges, the layoffs perpetrated at the level of companies like Coinbase, and also the volatility of its assets demotivate investors.

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