NEW YORK (Reuters) – Deputy U.S. Treasury Secretary Wally Adeyemo said on Wednesday the Biden administration feels confident about the U.S. economy going forward and that it is possible to bring down inflation while maintaining growth.
“We come into this moment from a position of strength,” he said, adding that consumer and corporate balance sheets are in good shape. He was speaking at an investment conference in New York.
Asked whether the U.S. economy was heading to a recession, Adeyemo said there was “a path” to reduce price pressures while maintaining momentum in the U.S. economy and a healthy labor market.
The U.S. is facing stubbornly high inflation, which the Federal Reserve is seeking to counter by tightening monetary conditions through a series of rapid and sizeable interest rate hikes that have raised the prospect of an upcoming economic contraction.
Adeyemo, however, said a “soft landing” – that the Fed may tame inflation and avoid a recession – was possible, but that external factors that have led to higher prices such as Russia’s war in Ukraine and COVID-19 lockdowns continue to be headwinds for the U.S. economy.
“We have the capacity … to take steps that we need to bring down inflation, but also make the needed investments to make sure that the economy continues to grow,” he said.
(Reporting by Davide Barbuscia, Carolina Mandl, and Doina Chiacu; Editing by Chizu Nomiyama)