Yellen: US economy is strong, all options are available against China’s excessive industrial capacity

US Treasury Secretary Janet Yellen said that US economic growth is likely to be stronger than indicated by weaker-than-expected first-quarter GDP data.

It stated that President Joe Biden’s administration keeps all options available to respond to threats resulting from China’s excessive industrial capacity, according to Reuters.

It indicated that the American proposal to exploit the benefits of frozen Russian assets worth $300 billion to help Ukraine may gain broad support from allies in the G7.

Yellen added that GDP growth in the first quarter may be revised upward after more data becomes available and that inflation will decline to more normal levels after a group of “unusual” factors pushed the economy to its weakest levels in nearly two years.

Yellen continued, “The American economy continues to perform very well,” in response to a Commerce Department report that showed that the gross domestic product in the United States grew 1.6% on an annual basis in the past quarter.

This is less than the 2.4% rate estimated by economists and less than half the rate of the last quarter of 2023.

The report also showed a worrying increase in inflation, with the core personal consumption expenditures price index, which excludes food and energy prices, rising 3.7% on an annual basis after rising 2% in the last quarter of 2023.

Yellen downplayed the rise in inflation above the target level of 2%, adding, “The fundamentals here are in line with inflation continuing to decline to normal levels.”