Tuesday 26 Sep 2023
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(Sept 19): Treasury Secretary Janet Yellen said the recent increase in oil prices is unwanted, but they should stabilise in time, with the US economy still on track for a soft landing.

Market expectations indicate that oil prices will “stabilise and move down” over time, Yellen said in an interview with MSNBC on Tuesday, adding that that was her own hope and expectation also.

Benchmark Brent crude oil topped US$95 a barrel for the first time since November on Tuesday. Yellen said that the increase reflects in part a previous decision by Saudi Arabia to maintain cuts in oil production, and also the economic recovery — albeit slower than expected — from pandemic lockdowns in China.

“We’re really on a good path toward a soft landing,” she said with regard to the US outlook. Yellen reiterated that the labour market is strong, inflation is coming down and there is “a lot of momentum” in the economy.

The Treasury chief reiterated that there is no reason for Congress to impose a shutdown of the federal government by failing to enact appropriations for the new fiscal year that starts Oct 1. She said the Treasury hasn’t modeled the impact of a shutdown on the economy, which would depend importantly on how long it lasted.

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