More shocks likely to ‘challenge’ economy, US treasury secretary

US Treasury Secretary Janet Yellen on Thursday warned about the fallout from the Russia-Ukraine war, saying it is likely that large economic shocks and disruptions continue to challenge the economy.

“Countries will fare better if their economies are more resilient and less fragile,” Yellen said in her address at the Brookings Institution.

“Improved understanding of breaks in supply chains, increases in commodity prices, bursting of asset bubbles, and labor and productivity shocks can help policymakers implement reforms that bolster our economic resilience.”

She said that energy price movements have been another significant source of global economic shocks, adding the Joe Biden administration’s proposed energy agenda is prepared to decrease the country’s reliance on fossil fuels.

“These shifts will mitigate our future vulnerability to oil price shocks,” she said.

“At the same time, they will abet the transition to cleaner energy sources which will, in due course, lessen the risks tied to natural disasters and climate change.”

Meanwhile, the US economy unexpectedly contracted 1.4% year-on-year in the first quarter of 2022, the Commerce Department’s first reading of the data showed on Thursday.

The market had estimated that the gross domestic product (GDP) will rise at an annual rate of 1.1% from January to March.

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