Janet Yellen also expressed an openness to a federal gas tax holiday to help give motorists some relief at the pump.
Stocks have declined almost 35% on average when a bear market coincides with a recession, experts say.
Yellen said overall consumer spending in the United States remains strong, while noting that spending patterns are changing, given the impact of rising food and energy prices. Yellen said household savings during the coronavirus pandemic will help sustain spending. The national saving rate has fallen to about 6%, below pre-pandemic levels, after reaching 16.6% in 2020, the highest on record dating to 1948, and 12.7% in 2021.
"I expect the economy to slow," Yellen said."It's been growing at a very rapid rate and the economy has recovered and we have achieved full employment. We expect a transition to steady and stable growth, but I don't think a recession is at all inevitable." Yellen echoed Biden's optimism in the face of economic headwinds. Biden in an interview with The Associated Press last week insisted that a recession is"not inevitable" and made the case that U.S. is"in a stronger position than any nation in the world to overcome this inflation."
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