Nydia Velázquez Questions Janet Yellen On Recession Predictions: ‘Can You Explain Your Expectation’?

5 months ago

On Tuesday, Rep. Nydia Velázquez (D-NY) questioned Secretary of the Treasury Janet Yelled on rising inflation during a House Financial Services Committee hearing.

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Transcript

00:00The time has expired.

00:01I recognize the gentlewoman from New York, Ms. Vasquez, for five minutes.

00:05Thank you, Mr. Chairman, and welcome, Secretary Yellen.

00:08Thank you for being here this morning.

00:11As you know, many working-class families

00:14and small businesses are concerned about inflation.

00:18You recently told Yahoo Finance that you expect inflation to come down,

00:23and as we get into next year, you believe inflation will get back to the 2 percent target,

00:29and you do not see the basis for a U.S. recession.

00:34Can you explain your expectation and how the policies of the Biden-Harris administration

00:39have helped temper the rate of inflation and given you this sense of optimism?

00:46Well, I'm optimistic because I believe that the big inflationary impulse that we saw in 2022

00:55largely was global, and it largely reflected supply problems stemming from the pandemic

01:05and its impact around the world.

01:07And due to the work of the Biden administration and firms in the economy

01:13and the pandemic being resolved, many of those supply issues are now fully resolved.

01:21So much of the pressure has diminished.

01:24On top of that, we have a strong labor market that has attracted many new people into the labor market.

01:33Labor supply has surged, and although the labor market was initially very tight,

01:42now we have a strong labor market, but one with fewer pressures that would create inflationary concern.

01:51So inflation is coming down.

01:54The measure the Fed focuses on is now running at 2.6 percent over the last year,

02:03and I believe that it will continue to come down over time.

02:13Rents and housing costs continue to leave it higher than we would ideally like,

02:24and it'll be a while before housing costs come down to a more normal level, but that process is in train.

02:35Thank you.

02:35And Madam Secretary, in his opening statement,

02:40Chairman McCambery mentioned the IMS warning about the U.S. debt burden.

02:47However, in the same Yahoo Finance interview, you were also critical of the tax cuts passed by Donald Trump

02:54and congressional Republicans, saying that that decision was responsible for many of the problems

03:01that we face now with our fiscal trajectory.

03:05Can you explain the fiscal problems that arose from Donald Trump's tax cuts

03:11and how the Biden administration is working to reduce these effects?

03:15Well, it was a tax cut that had a very large impact on the deficit and the national debt,

03:23so it was costly, it was regressive, it did not pay for itself,

03:29and in a way, it concealed its true cost by including delayed raisers, phase-outs, and sunsets,

03:39some of which Congress will have to deal with next year.

03:43We did not see an investment boom that was promised by the act,

03:49and President Biden believes it's important to be on a fiscally sustainable path.

03:56Thank you.

03:57I hope the other side is listening.

04:00Secretary Yellen, millions of businesses are required to report their beneficial ownership information to FinCEN by January 1st.

04:10Yet, according to several conversations I'm having with businesses in my district and across the country,

04:16many legitimate businesses are unaware this requirement exists.

04:22How is FinCEN and the Treasury Department working to increase awareness of this requirement,

04:28particularly amongst rural and underserved businesses in which English is not the primary language?

04:37Well, we, FinCEN, has a very active program of outreach and of education,

04:47and I believe that you participated, and I want to thank you for that.

04:53I'm hosting an event designed to inform people and business owners about what the requirements are.

05:03There is, you know, other language support.

05:08If I could just make a suggestion, I would like to see a better coordination, Mr. Chairman.

05:16Please give me just a second.

05:18To work closely with the Small Business Administration, we have a network of SBDCs across the country, over 1,000.

Nydia Velázquez Questions Janet Yellen On Recession Predictions: ‘Can You Explain Your Expectation’?

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