Risks to U.S. financial stability could materialize, citing a “dangerous and volatile environment”

Noting that “inflation remains too high and that we are facing serious global headwinds“, she noted that the Treasury “is closely monitoring the financial sector, as global developments have led to increased market volatility“.

Janet Yellen warns of financial stability risks in the United States.

Treasury Secretary Janet Yellen warned of risks to the financial stability of the U.S. economy as she answered questions following her speech at the annual Securities Industry and Financial Markets Association (SIFMA) on Monday.

Citing a “dangerous and volatile environment” for the global economy, including soaring energy prices and increased volatility in financial markets, Janet Yellen warned that in the United States:

Risks to financial stability could materialize.

“We are keeping a close eye on the financial sector as global developments have led to increased market volatility“, added Janet Yellen. “To date, the U.S. financial system has not been a source of economic instability. While we continue to monitor emerging risks, our system remains resilient and continues to function well despite uncertainties.“

Yellen on the US economy and inflation

Treasury Secretary Janet Yellen also spoke about the U.S. economy and inflation in her speech at the SIFMA annual meeting on Monday. While noting that “the U.S. economy retains significant strength“, she cautioned:

Inflation remains too high, and we face serious global headwinds.

“Growth is slowing globally. Energy and food prices have risen, in part due to Putin’s terrible war in Ukraine and the lingering effects of the pandemic abroad. Climate change continues to devastate communities, exacerbating energy and food shortages in Europe and around the world“, the Treasury Secretary continued. “We are very mindful of these risks“.