U.S. Treasury Secretary Janet Yellen said inflation was the number one economic challenge facing management and the nation.
Speaking at a hearing of the U.S. House of Representatives’ Financial Services Committee, Yellen stressed that inflation is a very important issue. “I agree with the president’s assessment that this is the number one economic challenge facing the administration and the nation,” Yellen said.
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Yellen pointed out that price increases have a significant negative impact on many vulnerable households, and they are focused on fighting inflation.
Reiterating that the U.S. Federal Reserve plays an important role in ensuring price stability and maximum employment, Yellen said that fighting inflation is the Fed’s responsibility, that they support the Fed’s independence and that the bank makes the appropriate decisions.
“The Fed has a critical role to play in bringing down inflation,” Yellen said. To do this, they are in the process of using their own independent judgments on tightening monetary policy,” he said.
Noting that they have taken a wide range of steps to combat inflation, Yellen noted that the U.S. labor market and banking sector are strong, household balance sheets are in good shape and borrowing costs are low, “All of which suggests that the Fed has a way to lower inflation without causing recession.”
Answering questions from committee members about digital assets, Yellen said they were working on a report examining the risks of fixed-time companies to financial stability.
Yellen stressed that there is potential to make the payment system faster and more efficient, but a regulatory framework against risks is needed.
“This week, in the last few days, we’ve seen the risks in real life,” Yellen said, pointing to the decline of Sabitkoin Terra.
Yellen said the risks of fixed-time banks are not yet on the systemic threat scale, “I wouldn’t call it a real threat to financial stability on this scale, but they’re growing very fast and present the kind of risks we know have been associated with bank escapes for centuries.”
Janet Yellen said the Central Bank’s Digital Currency (CBDC) could reduce the spread of fixed currencies.
As investors fled risky assets due to the unfavorable environment created by high inflation, bloodshed began in the cryptocurrency market.
While fixed coins stand out as an important part of the cryptocurrency market, the decline in the 4th largest fixedkoin Terra has raised concerns about fixed coins.
Associated tokens UST and LUNA have fallen sharply since May 7. LUNA has fallen below $US1 in ust as it approaches zero from $80 in a few days
