U.S. Treasury Secretary Janet Yellen praised the Biden administration’s COVID-19 response in her final major speech before leaving office, highlighting robust economic growth and job recovery. She credited measures like stimulus checks, enhanced unemployment benefits, and child tax credits with averting millions of job losses and reducing income gaps for those impacted by the pandemic.
Yellen acknowledged the $1.9 trillion American Rescue Plan of 2021 contributed “a little bit” to inflation but emphasized its role in supporting demand, preventing long-term unemployment, and avoiding economic contraction. Without the stimulus, she argued, the U.S. could have faced unemployment rates as high as 10%-14% in 2021-2022, with millions more out of work.
The U.S. unemployment rate has remained below 4% for over two years, the longest streak since the 1960s. Yellen highlighted that inflation fell earlier in the U.S. than in other advanced economies, thanks to eased supply disruptions.
While celebrating the economy’s strong growth, low inflation, and resilient labor market, Yellen stressed the need for further action to address structural challenges limiting middle-class opportunities. She championed “modern supply-side economics,” advocating for investments in infrastructure, workforce development, and research instead of tax cuts for the wealthy.
Yellen concluded by underscoring the importance of balancing employment and inflation goals, arguing that a more cautious fiscal approach during the pandemic would have led to lower output and greater economic hardship.
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