Janet Yellen: America Needs ‘Some Good Luck’ to Avoid Hard-Landing into Recession

Democrat President Joe Biden’s Treasury Secretary Janet Yellen has stated that America needs “some good luck” if the economy is to avoid hard-landing into a recession.

Speaking during an interview with CNN on Sunday, Yellen failed to inspire confidence that the Federal Reserve is going to steer the United States away from economic ruin

“The Fed is going to need great skill and also some good luck to achieve what we sometimes call a soft landing,” Yellen told CNN.

Yellen is referring to an economy where inflation falls below 2% and unemployment remains low.

If the American economy will likely we will be plunged into a recession after a “hard landing” if it does not achieve that “soft landing.”

Meanwhile, Fed chairman Jerome Powell believes all roads lead to varying degrees of “pain.”

Since the spring, the Fed has attempted to usher America toward economic success by hiking interest rates.

Yet, Powell maintains that not raising the rates would bring about more “pain.”

“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Powell said at the annual policy speech at Jackson Hole, Wyoming.

“These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”

It is expected that the Fed will announce another round of rate hikes.

However, tech entrepreneur Elon Musk is warning that further hikes could cause deflation.

Musk holds such dire predictions because he, alongside economist David Branchflower, believes that inflation has peaked.

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Branchflower recently wrote in Politico that “policymakers are forgetting their history, and now they’re basically winging it” and risking raising rates when inflation is already cooling.

Other economists, like Goldman Sachs’s Tim Moe, argue that more effort is needed on closing the gap in the labor market.

“The real sticky bit of inflation is, of course, in the labor market, and that’s where there’s some progress that’s been made,” Moe told Business Insider.

“But a lot more that has to be accomplished.”

“One of the issues or the indicators that we look at is the gap between job openings and the labor force,” Moe said.

“That’s coming down. And that’s actually the key to a soft landing.”

Yet, according to the Fed’s Vice Chair Lael Brainard, the board’s main concern remains inflation and they feel confident in the labor market.

“Monetary policy will need to be restrictive for some time to provide confidence that inflation is moving down to target,” she said recently.

“The economic environment is highly uncertain, and the path of policy will be data dependent,” she added.

So according to the “experts,” America’s options are either a hard landing and subsequent recession, deflation, or throwing our hopes on a wing and a prayer.

When the treasury secretary is incorporating “good luck” into her economic remedies to avoid a hard landing or deflation, Americans’ uneasiness about the federal government’s ability to solve inflation is entirely reasonable.

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By Frank Bergman

Frank Bergman is a political/economic journalist living on the east coast. Aside from news reporting, Bergman also conducts interviews with researchers and material experts and investigates influential individuals and organizations in the sociopolitical world.

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