The Hill: Yellen ‘feeling very good’ about chances for economic soft landing

Article published: 11 September, 2023

IB Economics syllabus: Macroeconomics (economic growth, inflation, monetary policy, unemployment)

Treasury Department Secretary Janet Yellen is optimistic about the U.S. achieving a soft economic landing without entering a recession. She comments on recent inflation trends, noting that while inflation has decreased from its peak, there was a recent uptick. The Federal Reserve Board is considering raising interest rates to target a 2% inflation rate.

Yellen also discusses labor market indicators, such as the jobless rate and labor force participation rate. The article touches upon the G20 summit in New Delhi and Yellen’s views on China’s economic policies, as well as the potential impact of slow economic growth in China on the U.S. economy.

IB Economics Internal Assessment (IA) Commentary You can discuss the concept of a “soft economic landing” and its implications for an economy, and you can talk about the significance of inflation rates and how monetary policy tools, like interest rates, are currently being used in the US to target the desired inflation rate of 2%. Using the Phillips Curve as a diagram, you can illustrate the relationship between inflation and unemployment – and make sure to use data from the article. Additionally, you can explore the strategic motivations behind such decisions, especially in the context of global economic cooperation and challenges.

Source of image: REUTERS/ Robert Galbraith

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