Treasury Secretary says oil price increase should stabilize in time

Christopher Condon and Viktoria Dendrinou, Bloomberg September 19, 2023

(Bloomberg) – Treasury Secretary Janet Yellen said the recent increase in oil prices is unwanted, but they should stabilize in time, with the U.S. economy still on track for a soft landing.

Market expectations indicate that oil prices will “stabilize and move down” over time, Yellen said in an interview with MSNBC on Tuesday, adding that that was her own hope and expectation also.

Benchmark Brent crude oil topped $95 a barrel for the first time since November on Tuesday. Yellen said that the increase reflects in part a previous decision by Saudi Arabia to maintain cuts in oil production, and also the economic recovery — albeit slower than expected — from pandemic lockdowns in China.

“We’re really on a good path toward a soft landing,” she said with regard to the U.S. outlook. Yellen reiterated that the labor market is strong, inflation is coming down and there is “a lot of momentum” in the economy.

The Treasury chief reiterated that there is no reason for Congress to impose a shutdown of the federal government by failing to enact appropriations for the new fiscal year that starts Oct. 1. She said the Treasury hasn’t modeled the impact of a shutdown on the economy, which would depend importantly on how long it lasted.

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