Yellen’s deputy sees the United States avoiding recession, with strong demand

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Deputy Treasury Secretary Wally Adeyemo predicts continued strong demand will help the U.S. economy avoid a recession amid growing fears the country is headed for a slowdown.

“Talking to CEOs, they made it clear to me that demand for their products and services remains strong,” Adeyemo said Wednesday in an interview with MSNBC television. “That’s what small business owners tell me too.”

His remarks come amid growing pessimism about the outlook for the economy. Earlier Wednesday, JPMorgan Chase & Co. CEO Jamie Dimon warned investors to prepare for an economic “hurricane.”

The Federal Reserve also said in its Beige Book report on Wednesday that growth appears to have slowed in recent weeks in the face of rising interest rates and high inflation.

Adeyemo offered a more optimistic message and said the Biden administration could take credit because of the spending programs it has led in Congress.

“The reason demand remains strong is that the investments the President has made in things like the US bailout and through the infrastructure package we have put in place will continue to put demand in our economy” , did he declare.

Public spending has been credited with helping the economy weather the Covid pandemic and bringing unemployment down to below 4%. But many economists have also blamed the fiscal response for fueling inflation, which hit a 40-year high in the year through March at 8.5%.

Adeyemo echoed the administration’s argument that unforeseen supply shocks and Russia’s invasion of Ukraine are largely responsible for the price spike.

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