Former Treasury Secretary Janet Yellen Weighs In on Tariffs and Bond Market
In a recent interview on CNBC’s “Squawk Box,” Janet Yellen, the former Treasury Secretary and current Distinguished Fellow in Residence with the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, shared her insights on the current tariff regime, the reactions of her colleagues, and the bond market’s response to recent news.
Yellen’s Thoughts on Tariffs
When asked about her views on the current tariff regime, Yellen expressed her concerns about the negative impact on the economy. She stated, “I think tariffs are costly for the economy. They raise prices for consumers, they reduce exports, they can lead to retaliation. And so I think they’re not a good policy.”
Colleagues Seeking Clarity
Yellen also mentioned that she has been fielding calls from her colleagues, who are seeking to make sense of the current situation. She noted, “I have been getting a lot of calls from colleagues asking, ‘What’s going on? Why is this happening? What does it mean for the economy?'”
Bond Market’s Reaction
Regarding the bond market’s reaction to recent news, Yellen explained that the market is “trying to discount future economic prospects.” She continued, “When there’s uncertainty about policy, it tends to lead to a flight to quality. And so, you see interest rates going down as a result.”
Impact on Individuals
The current tariff regime and the resulting uncertainty can have a significant impact on individuals. According to a report by the Economic Policy Institute, the tariffs could result in a net loss of approximately 165,000 jobs by the end of 2020. Furthermore, consumers may face higher prices for goods due to the tariffs, which can put a strain on household budgets.
- Higher prices for goods: Consumers may face increased prices for goods, as companies pass on the added costs of tariffs.
- Job losses: The tariffs could lead to job losses, particularly in industries that rely on imports or exports.
- Economic uncertainty: The ongoing trade dispute creates economic uncertainty, which can negatively impact consumer and business confidence.
Impact on the World
The effects of the tariff regime extend beyond the United States. Other countries, particularly China, have retaliated with their own tariffs, which can lead to a global slowdown in trade. This can result in decreased economic growth and increased tensions between countries.
- Decreased global trade: The tariffs can lead to a decrease in global trade, which can negatively impact economic growth.
- Increased tensions: The ongoing trade dispute can lead to increased tensions between countries, potentially leading to further escalation.
- Negative impact on global supply chains: The disruption of global supply chains can lead to delays and increased costs for businesses.
Conclusion
In conclusion, the current tariff regime and the resulting economic uncertainty can have a significant impact on both individuals and the world. Former Treasury Secretary Janet Yellen, who has been fielding calls from colleagues seeking to make sense of the situation, has expressed her concerns about the negative impact on the economy. As the situation continues to unfold, it is essential to stay informed about the latest developments and their potential impact on your personal finances and the global economy.
Stay tuned for more insights and analysis on economic news and trends.
