Yellen: People’s View of Economy Has ‘Disconnect’ with How Economy’s Doing, People Positive About Personal Finances

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On Tuesday’s broadcast of MSNBC’s “Morning Joe,” Treasury Secretary Janet Yellen stated that there is “a disconnect” between how the economy’s doing and how people feel it’s doing and that people are “positive” about their own financial situations. But acknowledged that “Americans have been reeling from high inflation.” She also argued that President Joe Biden’s agenda will take time.

MSNBC Contributor and BBC U.S. Special Correspondent Katty Kay asked, “I want to go back to the rosy picture that you just painted of the U.S. economy with inflation coming down and unemployment coming down and answer the riddle that the White House is finding so befuddling, which is, with those good numbers, why polling amongst the American people is so pessimistic about the economy. And I’m wondering if it’s that they, just having been through a period of inflation, they fear that inflation might come back again, those high oil prices that Mika was talking about, the OECD is forecasting slower growth next year, something like 1.3% I think for the U.S., is it just fears about the future? I’m not asking you to play therapist with the American voter, but there seems to be a disconnect between the numbers we’re seeing and the way people are feeling about the economy and how do you account for it?”

Yellen answered, “I agree with you that there’s a disconnect, and I don’t have a simple and convincing answer. But Americans have been through a lot. The pandemic really took a toll on American families, on children, on households. We are enjoying a remarkable recovery, but also, with high inflation, much of it reflecting supply bottlenecks that developed during the pandemic, and then with Russia’s brutal attack on Ukraine, we saw a surge in gas prices, in food prices. Americans have been reeling from high inflation. They do realize in polls that it’s coming down. And Americans’ financial situation actually improved during the pandemic. Interestingly, when Americans are asked about their own personal financial situation, they’re positive on that. The negative results you cite mainly reflect their answers to how is the economy more broadly doing. I think it’s going to take some time. We’ve had a trifecta of legislation that President Biden and Congress have passed that we’re investing in America in ways we haven’t for decades.”

Follow Ian Hanchett on Twitter @IanHanchett

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