Treasury Secretary Janet Yellen



Photo:

Al Drago – Pool Via Cnp/Zuma Press

WASHINGTON—The $1.9 trillion Covid-19 relief package passed by the Senate should allow the U.S. economy to return to full employment in 2022, Treasury Secretary

Janet Yellen

said Monday.

“We expect the resources here to really fuel a very strong economic recovery,” Ms. Yellen said in an interview on MSNBC. “I’m anticipating, if all goes well, that our economy will be back to full employment, where we were before the pandemic, next year.”

Without the legislation, the Congressional Budget Office has estimated that the labor market could take until 2024 to recover, Ms. Yellen noted.

Ms. Yellen reiterated that she doesn’t expect the spending to cause the economy to overheat, resulting in high inflation and interest rates.

“I really don’t think that that’s going to happen,” Ms. Yellen said. “We had a three-and-a-half percent unemployment rate before the pandemic and there was no sign of inflation increasing. It was too low rather than too high.”

Federal Reserve Chairman Jerome Powell tells WSJ’s Nick Timiraos there is no plan to raise interest rates until labor-market conditions are consistent with maximum employment and inflation is sustainably at 2%. Photo: Eric Baradat/Agence France-Presse/Getty Images.

Write to Paul Kiernan at [email protected]

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