(Finance) – The United States Secretary of the Treasury, Janet Yellen, believes that the risk of a recession in United States is decreased thanks to the resilience of the labor market and falling inflation.
However, warns that a slowdown in consumer spending could be the price to pay in the fight against inflation. He said this in response to a question from Bloomberg News on the sidelines of the Paris Conference on Financing for Development.
In an exclusive interview with Wall Street Journalon the sidelines of the Paris Conference, Yallen hHe said more banks are likely to look to merge this year as higher interest rates and the recent banking turmoil are making it more expensive to rely on deposits alone.
Yellen said paying higher deposit rates is hurting those banks’ profitability and will see the impact when second-quarter earnings are released in July. when weaker earnings could potentially prompt mergers.
“I don’t think it’s a big threat to the industry, but there will probably be banks that will end up wanting to merge,” explained the Treasury secretary, clarifying that the trend continued after the collapses of Silicon Valley Bank and Signature Bank in March, when the small and medium-sized banks have seen depositors switch to larger institutions.