US issues dire warning for global economy
US Treasury Secretary Janet Yellen said on Wednesday that higher food and energy prices were having ‘stagflationary’ effects, namely depressing output and spending and raising inflation all around the world.
She told reporters ahead of a meeting of G7 finance ministers in Bonn, Germany, that she doesn’t see the US going into recession.
“We have inflation obviously, the Fed is tightening monetary policy to address it,” she said, adding “we are in a global environment where there are significant risks and pressures but I really don’t expect the United States to fall into recession."
According to Yellen, “Europe is more vulnerable and of course more exposed on the energy front than the United States is.”
She also stressed that the global economy faces risk of a “potential slowdown.”
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