In response to the weaker-than-expected initial estimate for U.S. gross domestic product from January through March, Yellen emphasized that the U.S. economy is still performing very well. While the GDP growth rate was less than half the pace in the fourth quarter of the previous year, mainly due to drags from trade and private inventories, Yellen downplayed these concerns and highlighted the strength of the overall economy.
The report also showed a concerning increase in inflation, with the personal consumption expenditures price index excluding food and energy rising at a 3.7% annual rate. This was a significant jump from the 2.0% pace in the fourth quarter of 2023. Despite this, Yellen believes that current performance is solid enough to withstand challenges like inflation increases and does not see a need for drastic action to address these issues. She remains optimistic about the overall strength of the U.S. economy and its ability to weather any challenges that may come its way.
