- There’s an “urgent need” for stimulus as the US faces “tough months,” Treasury Sec. Yellen said.
- New economic aid can serve as a bridge before herd immunity is achieved, she added.
- The department is looking into the GameStop-trading saga and could take action, Yellen said.
- Visit the Business section of Insider for more stories.
The US economy will struggle for at least a few more months before falling COVID-19 cases and stimulus can drive a full recovery, Treasury Secretary Janet Yellen said Thursday.
In her first television interview since being confirmed last week, Yellen emphasised the importance of using stimulus to bridge the final months of the virus-induced slump.
The Treasury secretary has spent much of her first days in office pushing for President Joe Biden’s $US1.9 trillion relief package. Democrats have taken steps to pass the measure without Republican support. But even with additional fiscal relief, the economy is a ways away from marked improvement, Yellen said on Good Morning America.
“This is really an urgent need, and we need to act big,” she added. “We’ve got some tough months ahead before we get control of the pandemic.”
Gauges of labour-market health, retail sales, and consumer confidence all ticked lower through the winter as soaring virus cases and new economic restrictions curbed activity. Some indicators have since shown signs of steady improvement, partially buoyed by the $US900 billion stimulus package passed in December.
Most recently, filings for unemployment benefits fell for a third-straight week after hovering above 900,000. Claims totaled an unadjusted 779,000 for the week that ended Saturday, landing below the consensus estimate of 830,000. The trend is encouraging but still leaves claims well above their pre-pandemic levels.
The path of the pandemic also shows a light at the end of the tunnel. The US reported 116,960 new coronavirus cases on Wednesday, according to The COVID Tracking Project. That’s the lowest reading since early November. Hospitalizations have also fallen over recent weeks, suggesting the country is finally getting a hold over the virus’s spread.
Yellen also addressed market volatility seen throughout January spurred by retail investors in forums like Reddit’s r/wallstreetbets. The crowd of casual investors took the stock market by storm by bidding up highly shorted stocks and driving unprecedented rallies in names like GameStop and AMC. Accusations of market manipulation on the online forums have since drawn interest from regulators and Congress.
The Treasury secretary said she would meet with the Federal Reserve, Commodities Futures Trading Commission, and the Securities and Exchange Commission to discuss the trend and potential wrongdoing.
Officials are looking closely at the events but need to “understand deeply what happened” before taking any action, Yellen said.
“We really need to make sure that our financial markets are functioning properly, efficiently, and that investors are protected,” she said.
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