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"I
don't think we're (going to) have a recession. Consumer spending
is very strong. Investment spending is solid," she told a New
York Times Dealbook event.
"I know people are very upset and rightly so about inflation,
but there's nothing to suggest that a ... recession is in the
works."
Yellen, who last week conceded she had been wrong about
predicting inflation would be transitory, told the event she
would not change U.S. policy decisions if she could go back in
time.
"I wouldn't do it differently," Yellen said, saying President
Joe Biden's signature $1.9 trillion American Rescue Plan was
needed to prevent a generation of Americans suffering from high
unemployment rates.
"Things can always happen that you don't expect. The world's
very uncertain," she said.
Combating inflation was President Joe Biden's top priority,
Yellen said, adding she did not expect gasoline prices, which
just reached $5 a gallon, to come down anytime soon.
She said American households were clearly concerned about
surging pump prices, which played a key role in shaping consumer
expectations, but it was "amazing" how pessimistic Americans
were about the economy given the fact that the United States now
had the strongest labor market since World War Two.
Biden had done "what he can do" to address high gasoline prices
by directing an historic drawdown from the Strategic Petroleum
Reserve, Yellen said. She added that U.S. officials would also
keep tightening sanctions aiming at punishing Russia and getting
it to stop the war in Ukraine.
As the Federal Reserve tightened monetary policy to contain
demand and bring inflation down, Yellen said she saw a path to a
soft landing that would avoid a recession.
(Reporting by Eric Beech and Andrea ShalalEditing by Chris Reese
and David Gregorio)
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