- Former Fed Chair Janet Yellen said the U.S. economy is in “excellent” shape but facing several risks.
- One of the most prominent is in wealth disparities that she said are “extremely disruptive.”
- In a downturn, the Fed would have little room to move, due to low rates, she added.
- Yellen also said tariffs the U.S. has leveled on Chinese imports aren’t doing any good.
NEW YORK — Pronounced wealth inequality that has built up for decades poses a major threat to a U.S. economy that is in otherwise “excellent” shape, former Federal Reserve Chair Janet Yellen said Thursday.
The central bank leader from 2014 to 2018 also said the U.S.-China tariff war is having a detrimental impact both on businesses and consumers through higher prices and a general air of uncertainty.
While she doesn’t see a recession on the horizon, she also noted that the risks are piling up.
“I would bet that there would not be a recession in the coming year. But I would have to say that the odds of a recession are higher than normal and at a level that frankly I am not comfortable with,” Yellen said at the World Business Forum.
With three rate cuts this year, there remains “not as much scope as I would like to see for the Fed to be able to respond to that. So there is good reason to worry.”