Yellen: Despite global risks, the US economy remains resilient

Despite “serious global headwinds” — including Russia’s war in Ukraine, rising energy prices and the lingering effects of the pandemic — the U.S. economy retains “considerable strength.” This was stated on Monday by US Treasury Secretary Janet Yellen, quoted by Fox News.

“Our economic plan will strengthen our resilience to a global shock,” she said.

The Labor Department reported earlier this month that inflation rose 0.4% in September from the previous month and 8.2% on a year-over-year basis. Those rates were higher than the 8.1% and 0.2% monthly gains forecast by Refinitiv economists, a worrisome sign for the Federal Reserve as it seeks to cool price growth and tame consumer demand with an aggressive rate hike campaign of interest rates.

In an even more troubling development that suggests core inflationary pressures in the economy remain strong, core prices – which strip out more volatile measures of food and energy – rose 0.6% in September from the previous month. Since the same time last year, core prices have risen 6.6%, the fastest since 1982.

The data all but ensured the US central bank would approve another 75 basis point interest rate hike – the fourth of its kind – at its next meeting on November 1-2. Rising interest rates threaten to trigger an economic recession, forcing businesses and ultimately consumers to cut back on spending.