Treasury Secretary Janet Yellen issued a stark warning about the economy and made what appeared to be a veiled statement of support with just 40 days left until the presidential election.
In an opinion piece written in the Wall Street Journalthe top economic official indicated that the US is on the right economic path and praised the policies implemented by the Biden administration over the past three and a half years. But she also warned that the U.S. must stay the course.
“Risks remain, but the data suggest we are headed for a soft landing,” Yellen wrote just days after the Federal Reserve announced its biggest rate cut in more than 16 years.
Yellen pointed out that inflation has fallen significantly from its peak, while the U.S. unemployment rate remains at historic lows. She also argued that economic growth has been strong.
“If we deviate from course, it could jeopardize our economic course,” Yellen wrote.
Treasury Secretary Janet Yellen speaks on the state of the U.S. economy in Washington, DC on September 19, 2024
“Permanent tax cuts that benefit the wealthy and go unpaid would explode the federal deficit. Withdrawing investment in the industries of the future would stunt growth. And pursuing untargeted, unstrategic international economic policies would raise costs for Americans and create global unrest,” she added.
In the op-ed, Yellen indicated she favors keeping Democrats in the White House as the Nov. 5 presidential election approaches. She also referenced Donald Trump’s economic proposals, including a 10 percent across-the-board tariff on goods entering the U.S.
This comes as polls show the economy is at the top of the agenda in the race between Vice President Kamala Harris and former President Trump, as both candidates during the campaign put forward differing economic visions for the future of the US.
Harris has called for a range of economic policies, ranging from expanding the child tax credit, as was done temporarily under the American Rescue Plan, to giving first-time homebuyers a $25,000 down payment and a controversial plan to ban rent-seeking and crack down on higher grocery costs.
The vice president has called for tax increases on the largest corporations and the wealthiest Americans to pay for her policy proposals.
Trump has pushed to extend tax cuts passed during his first term, which expire at the end of next year. He has also proposed ending taxes on tips, Social Security and overtime.
Yellen did not mention specific policies or names of the candidates, but she did mention the vice president’s work in the Biden administration.
Treasury Secretary Janet Yellen’s op-ed warning that the U.S. must stay the course or risk “jeopardizing” the country’s economic trajectory comes as the 2024 presidential election gathers pace. While Yellen did not mention Harris by name, she did mention the vice president when writing about the Biden administration’s work on the economy and cutting costs
“At this point, our policy choices are critical,” Yellen wrote. “The president, the vice president, and I believe we need investments that lower costs and redouble our strategy for strong, broad-based, long-term growth.”
Yellen acknowledged that energy, housing and health care prices are still too high and pledged to “The highest economic priority is to reduce it.’
The Treasury Secretary pointed out that the U.S. labor market recovered more quickly from the 2020 recession amid the pandemic than from previous recessions, and the U.S. outperformed other advanced economies in terms of economic growth and lower inflation.
Yellen called for building on investments made so far during Biden’s administration, including the infrastructure bill, the CHIPS and Science Act and the Inflation Reduction Act, and expanding support for child care.
“Our economic strategy has helped America weather difficult events, from a global pandemic to the largest war in Europe since World War II, and build for the future,” Yellen wrote. “Our administration is committed to maintaining and building on our progress.”
The op-ed comes as a series of recent polls show an extremely tight race between Harris and Trump in the final sprint before the election, including in the seven crucial states likely to decide the election.
A CBS News poll shows Harris is doing better among people who currently have a positive view of the national economy.
Among likely voters who believe the economy is good, 88 percent support Harris. Among those who believe their personal finances are good, 64 percent support the vice president.
Despite the improvements, many registered voters still do not believe that things are going well. Only 39 percent said that the U.S. economy is in good shape, while 59 percent said it is bad.