U.S. Treasury Secretary: U.S. debt is balanced relative to the size of the economy

U.S. Treasury Secretary Janet Yellen stated that if the U.S. debt is balanced relative to the size of the economy, they are at a “reasonable” level.

Yellen shared her views on the state of the country’s economy, the labor market, inflation outlook, U.S. debt burden, and frozen Russian assets in an interview with CNBC television.

Regarding proposals to use income from these assets to aid Ukraine, Yellen said, “Our view is that seizing assets is legally, morally, and economically reasonable. But what we’re looking for is finding a way to keep allies together, finding a way to do something jointly that all partners supporting Ukraine can agree to.”

Yellen explained that there has been a very rapid pace of job growth in the country, but at the same time, the unemployment rate has ticked up slightly.

Highlighting that the unemployment rate is still lower than historical levels, Yellen assessed, “The labor market is a little less hot and has become a little more normal. It’s starting to look more like pre-pandemic times.”

Yellen noted that wages are increasing, but at a slower rate, and she emphasized that this does not appear to pose a threat to inflation.

Discussing the country’s debt, Yellen remarked, “If the debt is balanced relative to the size of the economy, we are at a reasonable place. From my perspective, we should look at the real interest cost of the debt. That’s actually the burden.”

source: prepared by Melisa Beğiç

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