Treasury Secretary Yellen says rates may have to rise somewhat to keep economy from overheating
Treasury Secretary Janet Yellen conceded Tuesday that interest rates may have to rise to keep a lid on the burgeoning growth of the U.S. economy brought on in part by trillions of dollars in government stimulus spending.
Yellen says she sees no inflation problem after rate hike comments roil Wall Street
U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth.
The initial comments made by Yellen, a former Federal Reserve chair, deepened a sell-off in tech stocks and pushed longer-dated Treasury yields higher.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Yellen said in taped remarks to a virtual event put on by The Atlantic.
“It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive (and) I think that our economy will grow faster because of them.”
Yellen says U.S. pushing to end global ‘race to the bottom’ on corporate taxes
The U.S. is taking a two-pronged approach toward its goal of implementing a worldwide minimum tax for corporations as it progresses through negotiations with a global consortium, Treasury Secretary Janet Yellen said Tuesday.
Getting countries around the world to implement a bottom level tax that all companies pay has been a goal the White House has set to stop firms from relocating their home operations to countries with cheaper rates.
That objective has taken on greater urgency as the administration seeks to raise taxes on U.S. companies. Yellen said she’s encouraged so far by developments in talks with other countries.
Along with the increase in the U.S. tax, “we propose to raise the global minimum tax and to close tax loopholes that allow American corporations to shift earnings abroad,” she told The Wall Street Journal’s CEO Council Summit.
Yellen said the U.S. has been in talks with member nations in the Organization for Economic Cooperation and Development.
Reference: Reuters, CNBC
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