Treasury Secretary Janet Yellen has said the U.S. economy is “doing very well,” even as surging energy prices, COVID-19 variants and Ukraine war have taken their toll on global markets.
Yellen also acknowledged inflation was too high and said reducing it is a priority for the Biden administration. However, she noted there is a way to do that while maintaining a healthy labor market, according to a CNBC report.
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Yellen’s View: “Firms, even with rising interest rates, have debt burdens that are by and large manageable,” Yellen said.
The Treasury Secretary added that U.S. financial markets continue to function well and her department is not witnessing any signs of deleveraging that generally happens in an environment of tighter monetary policy.
On OPEC+: Yellen also stated the decision of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to trim oil output and Russia’s invasion of Ukraine have also impacted liquidity in the markets. But there are no signs that merit serious concern, she said.
Last week, she called the OPEC+ decision “unhelpful and unwise” for the global economy, saying it was especially harmful to emerging markets.
Dollar Moves: Yellen said worries about the strength of the greenback are also a natural result of different paces of monetary tightening in the U.S. and other nations.
“The dollar is a safe haven, so when times are uncertain, we experience capital inflows into our safe markets,” Yellen said.
Price Action: The United States Brent Oil Fund BNO has gained over 41% since the beginning of the year, while the Vanguard Energy Index Fund ETF VDE has gained over 39% in the same period.
Image and article originally from www.benzinga.com. Read the original article here.