Janet Yellen: US economy is strong, but some areas are slowing | Treasure | Credit | GDP Growth | the world

The U.S. economy remains strong on the back of strong consumer spending, but some areas are slowing, Treasury Secretary Janet Yellen said, adding that continued progress will be made in reducing inflation over the next few years.

In an interview with CNBC, Yellen said that while banks may struggle with commercial real estate and face some consolidation, the system has plenty of liquidity and can generally withstand any pressure.

Yellen said legislation to raise the debt ceiling and reduce the deficit by more than $1 trillion over a decade would support the Federal Reserve’s efforts to reduce inflation.

Asked about Richmond Fed President Jeffrey Locker’s comment that the current range of 5 to 5.25% should go to 6% to control inflation, Yellen pointed out that it was the Fed’s decision.

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“Consumer spending continues to grow very strongly, but you also see parts of the economy slowing downYellen said.

“This is a very competent judgment of my former central bank colleagues. As I said, I think the key is to try to reduce inflation. It is an absolute priority“, he added.

He said banks will face some difficulties related to commercial real estate

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“My general view is that the level of capital and liquidity in the banking system is strong and even if there are some problems, the banks should be able to withstand the stress.“, he pointed out.

Asked if he would support more consolidation among banks, the current diversified set-up with community, regional and large institutions was a “fortaleza“For the U.S. economy, but it has room for further consolidation.

Yellen said she does not want to see America’s banking diversity threatened.But certainly in this environment some banks are experiencing revenue pressure and there is a drive to see some consolidation”.

Source: Reuters

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