(Finance) – While i global markets are falling sharply over concerns of an imminent monetary tightening, both in the United States and in Europe, two of the most influential voices in world finance try to show confidence. Janet Yellen, US Treasury Secretary, and Christine Lagarde, President of the European Central Bank, commented on global growth trends and expectations on monetary policy choices in a series of interviews alongside the meetings of the International Monetary Fund going on these days in Washington.
The ECB chief said there is a strong possibility that Frankfurt will raise interest rates this year. “If the situation continues as expected at the moment, there is one strong likelihood that rates will rise before the end of the year – Lagarde told CNBC – How much and how many times, remains to be seen and will depend on the data. “However, the former French Minister of Economy said that the eurozone economy will continue to grow and it will be unlikely to see stagflation or a period of high inflation coupled with stagnant economic output.
During the same joint interview, Yellen said that inflation may have peaked in the United States, but warned that prices could remain high “for a little longer”. The Treasury Secretary said the US economy was proving “very resilient” in the face of a series of shocks and did not foresee it would fall into recession. “I don’t expect a recession“he stressed.
In another Bloomberg interview, Yellen said it’s worth considering taking steps to lower US tariffs on Chinese goods, given the “desirable effects” such a move could have on lowering inflation in the country. “We want to do everything we can to bring inflation down,” the former Federal Reserve chairman said, citing President Joe Biden’s efforts to release oil reserves and moves to address supply chain disruptions. So tariff cuts are also “worth considering”. “It’s something we’re looking at,” he added.