US Treasury Secretary Janet Yellen indicated that she “believes that the US economy does not need a further strict tightening of monetary policy to eliminate inflationary expectations, and that it is on the right track to achieve a ‘soft landing’.” A soft landing is reducing inflation by calming the pace of economic growth. Without causing it to slip into the clutches of stagnation.
Yellen told reporters after a speech she delivered at a lithium processing plant in North Carolina that the Federal Reserve (the US central bank) was sometimes forced in the past to tighten monetary policy to prevent inflation from becoming so ingrained in the joints of the economy that it causes a recession.
She explained: “We do not need that now. I believe that there are very good signs that indicate that we will achieve this smooth decline with unemployment rates stabilizing in one way or another… and growth slowing to a sustainable level. I believe that we are at this stage.”
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