Former Federal Reserve Board Chairman Janet Yellen speaks at a press conference following a Federal Open Market Committee meeting on Sept. 20, 2017 in Washington, DC.
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Treasury Secretary Janet Yellen said Friday that despite strong job growth last month, Congress still needs to get “big” by adopting President Joe Biden’s $ 1.9 trillion aid package to help millions of people get back to work faster. get work.
In an interview with PBS NewsHour on Friday, Yellen said Biden’s package should not be shortened just because the February jobs report found that 379,000 new jobs had been created, the best since October.
At that rate, the country would still need more than two years to return to full operation, she said. But with the government’s package, she said the country could see a return to full employment next year.
“It’s a big package, but I think we need to get big now, and we can afford to get big,” said Yellen. “The most important thing is to get our economy back on track and help people get their lives back to ensure this pandemic does not cause lasting damage to our workforce.”
Yellen said the unemployment rate, which fell to 6.2% in February, exaggerated the improvement in the workforce, not counting the 4 million people who have stopped looking for work and lost the labor market. She said the actual unemployment rate is 10%.
Following House approval last week, the Senate is now discussing the $ 1.9 trillion aid package with supporters trying to keep Democrats on board in the 50-50 chamber as no Republicans are expected to vote for the measure .
When asked about the turmoil in US financial markets over the past two weeks, as interest rates started to rise, Yellen said she does not see this development as a sign that investors are starting to worry that inflation is spiraling out of control. She said the rise in rates is a sign that the outlook for the economy is starting to improve as more people are vaccinated and Biden’s tax package makes its way through Congress.
The Federal Reserve “has the tools to deal with inflation if it becomes a problem, but I don’t see any markets … concerned about that,” Yellen said.
Yellen also said Biden remains strongly committed to raising the minimum wage to $ 15 an hour. The government will look for other legislation to include the bill later this year, after the Senate MP ruled it could not be part of the emergency relief bill, she said.
The government is working on a “Build Back Better” measure to increase infrastructure spending, which will also be used to address the problems of racial inequality by increasing support for vocational training and education, she said. The administration also wants to address other issues, such as paid time off and childcare, she said.
Government debt, which has grown to levels not seen in terms of its relationship to the total economy since the end of World War II, is not a threat at this point as interest rates, although they have risen, still historically remain remain unchanged. low levels, she said.
“The spending we are doing now will undoubtedly help our debt path to get our economy back on track,” said Yellen.