US Treasury secretary expects economy to grow despite recession fears | World News

secretary of the treasury janet yellen The world’s largest economy is expected to continue growing, despite heightened recession fears amid recent banking turmoil.

dramatic breakdown Silicon Valley Bank (SVB) and Signature Bank unnerved the industry last month, prompting U.S. authorities including the Treasury Department and the Federal Reserve to step in to prevent contagion.

While the situation has calmed down, analysts warn that the effects of recent instability are likely to continue as banks tighten lending standards, reducing available credit for households and businesses.

But Yellen said in an interview with AFP on Thursday: “I continue to expect the U.S. economy to grow, the labor market to remain strong and inflation to decline.”

her comment followed JPMorgan Chase CEO Jamie Dimon warned this week that the current crisis is not over and will still be felt for years to come.

While he noted that the situation today is nothing like it was during the 2008 financial crisis, he added that it was unclear when the problems would end.

When asked about it, Yellen said she was committed to securing all deposits and monitoring the state of the banking system.

Officials are also “ready to use all of our tools as needed for any size agency to keep the system safe and secure,” she said.

After SVB collapsed, U.S. authorities drew up plans to ensure its customers were able to withdraw their deposits.declared exceptions like signature bank.

The Fed and other major central banks later launched a coordinated effort to increase lenders’ access to liquidity.

“Our banking system is strong and resilient,” Yellen said, adding that it also has strong capital and liquidity.

“The actions we have taken aim to reinforce this and ensure broad public confidence,” she told AFP.