Treasury Secretary Yellen Won't Rule out Recession, Talks China but Doesn't Say Much

Janet Yellen appears on Face the Nation 7-9-23. (Credit: Face the Nation)

Treasury Secretary Janet Yellen is in the midst of a busy trip to China, where, as my colleague Nick Arama reported, she got the official proceedings rolling by repeatedly bowing in front of Chinese Vice Premier He Lifeng in Beijing. Doesn’t exactly project a show of strength, does it?


She further embarrassed herself by getting his name wrong.

On Sunday, she spoke from Beijing to Margaret Brennan on “Face the Nation” and talked about the U.S.-China relationship and our economic prospects. When will “economic growth will be back at a point like it was before the pandemic?” Brennan asked. I could have answered for Yellen—“when we get a new Republican president.”

Yellen had her own thoughts:

Well, you know, the [Trump] economy before the pandemic was operating at what I would describe as full employment, with very low unemployment growth- very low unemployment rates, and growth at moderate levels. When the pandemic struck, there was huge job loss and a contraction in our economy.

And as recovery took place, due to President Biden’s economic policies, and success with our vaccination effort, there was a very rapid, a dramatic rebound, the labor market recovered.

Biden’s economic policies?! The ones that have given rise to historic inflation? Meanwhile, I don’t know what success she’s talking about with the COVID vaccinations—they didn’t stop transmission as promised, and virtually no one wants the shots anymore. Lastly, the labor market recovered because the economy had been artificially stifled by draconian mandates and lockdowns at the federal and state level. The Biden administration finally ended the national state of emergency in April (months if not years after it should have been).


Brenna asked if the threat of a recession was off the table. Yellen indicated that it could still be coming:

It’s not completely off the table. But we would expect, with the job market as strong as it is now, to see a slower pace of ongoing job gains. Prime-age labor force participation is at the highest level in several decades, so we’ve seen this strong job market attract workers back to it. But as- as that stabilizes at a high level, we should expect the monthly job gains to be coming down toward a more normal level.

The economy has improved since the pandemic, this is true. However, Biden’s profligate spending jacked up inflation to such levels that many, if not most, Americans don’t feel that it’s doing all that great. In fact, a CNBC All-America Economic Survey conducted in April showed that a stunning 69 percent of respondents viewed the economy negatively. The same poll showed that 62 percent of Americans disapproved of how President Biden is handling the economy, while just 34 percent approved.

Yellen and Brennan also held an extensive talk about China and its desire to dominate the world stage. However, the treasury secretary mostly avoided specifics in her answers and dodged questions about the spy balloon and other CCP aggressive behavior. Instead, she painted a rosy picture of mutual cooperation:


Well, I participated in the meeting between President Xi and President Biden in Bali and on both sides, the sentiment that was expressed is that the world is big enough for both of our countries to thrive, to cooperate on shared global challenges, to have a meaningful economic relationship, and that we needed to stabilize our relationship to make sure that we were able to accomplish that.

Their conversation lasted more than 15 minutes, but Yellen was playing her cards close to the vest regarding China and talked in general terms, rarely offering specifics. I understand that she wanted to be diplomatic—and not call Chinese President Xi Jinping a dictator like her boss did recently—but what she didn’t project was strength.

She lost that battle the moment she started bowing to the Vice Premier.

Full interview:


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