December 14, 2022

Sec. Janet Yellen sees economic growth slowing and lower inflation on the horizon

United States Secretary of the Treasury Janet Yellen says, barring any unanticipated shocks to the global economy, inflation in the United States should continue to recede over the next year.

In a wide-ranging interview with 60 Minutes correspondent Norah O'Donnell, Yellen discussed the state of the U.S. economy, the risk of recession, and the economic implications of Russia's war on Ukraine.

"There's a risk of a recession. But it certainly isn't, in my view, something that is necessary to bring inflation down," Yellen said.

"When I talk to business leaders, they say, 'We're preparing for a recession,'" O'Donnell told Yellen. "So some have said to me, 'Ask the treasury secretary. What does she know that we don't know?'"

"Economic growth is slowing substantially. And businesses see that. Look, we had a very rapid recovery from the pandemic. Economic growth was very high. And there was a surge in hiring, put people back to work. We got people back to work. We closed that gap. We have a healthy labor market. To bring down inflation, and because almost everybody who wants a job has a job, growth has to slow," Yellen said. "We are at or beyond full employment. And so it is not necessary for the economy to grow as rapidly as it has been growing to put people back to work."

A central figure in modern American economics, Yellen is the nation's first female treasury secretary and was the first woman to serve as chair of the Federal Reserve Board, from 2014 until 2018. She is the only person to have led both agencies and head the White House Council of Economic Advisers, which advises the President on domestic and international economic policy.

Yellen told 60 Minutes she intends to continue in her post for the duration of President Joe Biden's administration.

"I'm very excited about the work that we're doing," Yellen told O'Donnell. "It includes things like transforming the Internal Revenue Service into a modern customer-friendly and highly efficient operation and closing what has been a very unfair tax gap in which lower income people pay who mainly are in wage and salary incomes, they pay the taxes that are due."

Secretary Yellen also said the country needs to modernize its tax system. The American tax code can often be confusing, difficult to navigate, and hard for taxpayers to reach. The National Taxpayer Advocate, an independent organization within the IRS, said during the 2021 tax year Americans placed 282 million phone calls to the tax-collecting service, of which only 11% were answered.

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