During an exclusive interview with Reuters, US Treasury Secretary Janet Yellen discussed the recent first-quarter GDP reading and the current state of the US economy. Despite the weaker-than-expected growth rate of 1.6% in the first quarter, Yellen stated that the US economy is performing well and inflation is moving towards a more normal level.
The Commerce Department reported that economic growth continues to be strong, with a robust job market and consumer spending. However, inflation in the US has slowed down but progress halted this year due to rising gas prices and high services and shelter costs. Federal Reserve officials have warned that bringing down inflation will be a challenging process, and they are expected to hold interest rates steady in their upcoming meeting.
Geopolitical tensions are on the rise with conflicts in Ukraine and the Middle East, as well as increased tension between the US-China relationship. President Joe Biden recently called for a review of tariffs on Chinese steel and aluminum, potentially increasing the existing tariff rate. The ongoing review is expected to be completed soon, and actions may be taken to enhance the effectiveness of tariffs based on the findings.
Overall, while there are challenges facing both domestically and internationally, Yellen remains optimistic about the future of the US economy.