Wednesday, February 1, 2023

Janet Yellen vows to take a strong stand against currency manipulation

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Janet Yellen warned US trading partners against currency manipulation and touted the importance of market-based exchange rates in her most comprehensive comments to date on the new Biden administration’s approach to the issue. international economic policy.

Ms Yellen, who is Joe Biden’s candidate for Treasury secretary, said “intentional targeting of exchange rates for a trade advantage is unacceptable” and that she “would oppose any attempt by foreign countries to artificially manipulate monetary values ​​to gain unfair advantage and trade ”.

Ms Yellen, former Federal Reserve Chairman, was speaking at a confirmation hearing before the Senate Finance Committee, where she is expected to receive broad support for the post of Prime Minister responsible for the management of the American economy under Mr. Biden.

During the hearing, Yellen also said that the Biden administration would “tackle China’s abusive, unfair and illegal practices” – her harshest comments to date regarding Beijing, adding that the new US president was ready to use the “full range of tools”. to straighten them.

She specifically challenged the fact that China “erects trade barriers and grants illegal subsidies to companies” as well as “the theft of intellectual property” and its “global labor and environmental standards”.

Ms. Yellen’s approach reflects a certain continuity with the Trump administration’s combative stance on the international economy. But she stressed that the United States would “need to work with its allies” to contain Beijing, which the outgoing president has struggled to do.

While Donald Trump has often touted his desire for a weaker dollar, Ms. Yellen clarified that “the United States is not looking for a weaker currency to gain a competitive advantage.”

His main message to lawmakers during the hearing, however, was on the national side. She pleaded for swift approval of the $ 1.9 billion economic relief package Mr Biden announced last week, saying deficit issues should take a back seat given the patchy and difficult recovery.

“Neither the president-elect nor I are proposing this back-up plan without an appreciation of the country’s debt burden,” Ms. Yellen said. “But right now, with interest rates at historically low levels, the smartest thing we can do is act big. In the long run, I think the benefits will far outweigh the costs, especially if we are concerned about helping people who have struggled for a very long time.

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