Yellen says she expects the U.S. economy to slow in the months ahead. She also expressed an openness to a federal gas tax holiday to help give motorists some relief at the pump. Several lawmakers have floated the idea as the average price of gasoline hovers around $5 per gallon.

Yellen says overall consumer spending in the United States remains strong. But spending patterns are changing, given the impact of rising food and energy prices. Yellen said household savings during the coronavirus pandemic will help sustain spending. The national saving rate has fallen to about 6%, below pre-pandemic levels.

Yellen echoed Biden’s optimism in the face of economic headwinds. “We expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable,” she said.“We have achieved full employment.”

Former Treasury Secretary Larry Summers says a recession is likely by the end of next year. The Federal Reserve on Wednesday approved its largest interest rate increase in more than a quarter-century to stem a surge in inflation. Biden in an interview with The Associated Press last week insisted that a recession was “not inevitable”
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