Yellen expresses confidence about economy's path

(MENAFN) US Treasury Secretary Janet Yellen expressed confidence on Thursday that the American economy does not necessitate a drastic tightening of monetary policy to address concerns about inflation. Yellen conveyed her belief that the economy is well-positioned for a "soft landing," emphasizing the importance of achieving a delicate balance between inflation and economic growth without precipitating a sharp downturn.

The concept of a "soft landing" entails a strategic approach to managing inflation by moderating the pace of economic growth, intending to avoid pushing the economy into a recession. Yellen underscored the significance of this approach, indicating that it serves as a proactive measure to control inflationary pressures without causing adverse effects on overall economic stability.

Yellen further elaborated on the historical context, highlighting instances when the Federal Reserve had to implement policy tightening measures to prevent unsustainable inflation. This proactive stance was crucial to preventing negative repercussions on the broader economy. However, Yellen conveyed optimism about the current scenario, noting a significant reduction in inflation rates and the return of some prices to pre-pandemic levels.

As the economic landscape shows signs of improvement, Yellen expressed hope that Americans will gradually experience enhancements in their economic conditions. This positive outlook aligns with the Treasury Secretary's confidence in the trajectory of the economy and the effectiveness of the current approach in steering towards a "soft landing."

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