Former Federal Reserve Chairman Janet Yellen speaks at a news conference following a meeting of the Federal Open Market Committee on September 20, 2017, in Washington, DC.
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Treasury Secretary Janet Yellen said Friday that despite strong job gains last month, Congress must still “go” by adopting President Joe Biden’s $ 1.9 trillion aid package to bring in millions. of people back to work faster.
In an interview with PBS NewsHour on Friday, Yellen said Biden’s package should not be cut just because the February job report showed 379,000 new jobs were created, the best presentation in the world. October.
At this rate, the country would need more than two years to return to full employment, she said. But with the administration’s package, she said the country would be able to return to full employment by next year.
“It’s a big package, but I think we have to go big now and we can afford to go big,” Yellen said. “The most important thing is to get our economy back on track and help people regain their lives to make sure this pandemic doesn’t permanently scare our workforce.”
Yellen said the unemployment rate, which fell to 6.2% in February, exaggerates the improvement in the workforce because it does not take into account the 4 million people who have stopped looking for work and quit the labor market. She said the real unemployment rate is 10%.
Following the House’s approval last week, the Senate is now debating the $ 1.9 trillion aid package, with supporters trying to keep Democrats on board in the 50-50 chamber because no Republican is expected to vote on the measure.
Asked about the turmoil in US financial markets over the past two weeks as interest rates began to rise, Yellen said she did not see the development as a sign that investors were beginning to worry that inflation was spiraling out of control. She said rising rates are a sign that the economy’s outlook is beginning to improve as more people are vaccinated and Biden’s fiscal package is making its way through Congress.
The Federal Reserve “has the tools to address inflation if it becomes a problem, but I don’t see the markets … worried about it,” Yellen said.
Yellen also said Biden remains firmly committed to raising the minimum wage to $ 15 an hour. The administration will look for other legislation later this year in which the proposal can be included after the Senate lawmaker decided it could not be part of the aid bill, she said.
The administration is working on a “Rebuild Better” measure to increase infrastructure spending, which will be used, and to address issues of racial inequality, increasing support for vocational training and education, she said. The administration also wants to deal with other issues, such as paid leave and childcare, she said.
The national debt, which has risen to unprecedented levels since the end of World War II in terms of its relationship with the total economy, is not a threat at this time, given that interest rates, even if they have risen, remain still historically low levels, she said.
“The spending we are making now is undoubtedly helping us on the path to debt, getting the economy back on track,” Yellen said.