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Treasury Secretary Janet Yellen on recession fears, inflation and the war in Ukraine

Janet Yellen: The 2022 60 Minutes Interview
Treasury Secretary Janet Yellen: The 2022 60 Minutes Interview 13:01

As inflation hovers at a 40-year high, the pandemic lingers, and the war in Ukraine rages, a growing number of economists and CEO's are saying the U.S. is headed for a recession.

The secretary of the treasury, Janet Yellen, essentially the nation's chief financial officer, says she's doing everything in her power to avoid one. Yellen is an economist with over 50 years of experience and the former chair of the Federal Reserve, the U.S. Central Bank in charge of setting American interest rates. She knows better than most about the delicate balance of trying to engineer an economy that keeps inflation at bay without causing widespread layoffs and a downturn.

We wanted to find out what lies ahead in the new year, so we spent the past week with secretary yellen to get an update on the economy.

Norah O'Donnell: What is 2023 gonna look like for the average consumer?

Janet Yellen: So I believe inflation will be lower. I am very hopeful that the labor market will-- remain quite healthy-- so that people can feel good about their finances and their personal economic situation.

Norah O'Donnell: I mean, it's been decades since the American consumer has had to deal with inflation like this.

Janet Yellen: Yes, and I hope that it will be short-lived. We learned a lotta lessons from the high inflation we experienced in the 1970s. And we're all aware that it's critically important that inflation be brought under control and not become endemic to our economy. And we're making sure that that won't happen.

Secretary Yellen told us she sees positive signs on the horizon that many of the underlying causes are slowly being resolved.

Janet Yellen:  First of all, shipping costs have come down. Delivery lags, which were very long-- those-- have shortened.

Norah O'Donnell: Gas prices down.

Janet Yellen: Gas prices are way down. I think we'll see a substantial reduction in inflation in the year ahead.

Norah O'Donnell: It's gonna take a year?

Janet Yellen: Well, I believe by the end of next year you will see much lower inflation. if there's not-- an unanticipated shock.

Norah O'Donnell: But for families who are paying more at the grocery store, when 2023 comes around, do they need to be worried about a recession?

Janet Yellen: There are always risks of a recession. The economy remains prone to shocks. But look, we have a very healthy banking system. We have very healthy business and household--

Norah O'Donnell: So you don't--

Janet Yellen: --sector.

Norah O'Donnell: You have said this, you do not believe there will be a recession next year.

Janet Yellen: There's a risk of a recession. But it certainly isn't, in my view, something that is necessary to bring inflation down.

Secretary of the Treasury Janet Yellen

In recent weeks, Amazon, DoorDash, Meta, CBS News' parent company Paramount, and Pepsi have all had layoffs.

Norah O'Donnell: When I talk to business leaders, they say, "We're preparing for a recession."  So some have said to me, "Ask the treasury secretary. What does she know that we don't know?"

Janet Yellen: Well, economic growth is slowing substantially. And businesses see that. Look, we had a very rapid recovery from the pandemic. Economic growth was very high. And there was a surge in hiring, put people back to work. We got people back to work. We closed that gap. We have a healthy labor market. To bring down inflation and because almost everybody who wants a job has a job, growth has to slow.

Norah O'Donnell: When you say growth has to slow, that means hiring.

Janet Yellen: We are at or beyond full employment. And so it is not necessary for the economy to grow as rapidly as it has been growing to put people back to work. 

Janet Yellen has spent her career in economics focused on putting people to work. As head of the San Francisco Federal Reserve in 2009, in the middle of the Great Recession, she gave her staff some memorable marching orders.

Janet Yellen: I tried to remind them that there are people behind the statistics that we look at that there are real people, and we really have to worry about their well-being. 

Norah O'Donnell: Thousands of people were being laid off. And you tried to remind everybody that-- that this is not about statistics. Right?

Janet Yellen: I think I said, "They're f***ing people." And I wanted people that worked for me to take seriously the harm and misery that was being experienced by all too many Americans.

Norah O'Donnell: I mean how does that affect how you set policy, how you operate here?

Janet Yellen: One has to realize that people are really suffering, and I try to make sure that everybody remembers we're implementing programs that affect people's lives. And we need to do it with a sense of compassion and urgency.

Secretary Yellen told us outside of the U.S. economy, the issue she spends the most time on is the war in Ukraine. The only nation's flag we saw in the halls of treasury besides the stars and stripes was the blue and yellow of Ukraine.

Norah O'Donnell: You have said that ending Russia's war against Ukraine is the single best thing we can do for the global economy.

Janet Yellen: Yes.

Norah O'Donnell: Do you see any evidence that that end is in sight?

Janet Yellen: We're doing everything we can to bring this war to a conclusion. Of course, we are providing considerable help-- to Ukraine, both military and economic.

Deputy Treasury Secretary Wally Adeyemo speaks with correspondent Norah O'Donnell

The agency in charge of implementing more than 1,000 sanctions on the Russian banking, energy and military industries isn't the State Department or the Pentagon – it's the Treasury. Yellen has put 41-year-old Deputy Secretary Wally Adeyemo in charge of efforts to cripple the Russian economy and deprive the Russian military of what it needs to fight.

Much of the financial war against Russia is being fought from behind closed doors at Treasury in rooms called secure compartmentalized information facilities or 'SCIFs.'

Norah O'Donnell: And what are some of the things that you can do in this secure room that will limit Russia's ability in Ukraine?

Wally Adeyemo: We're able to view intelligence on Russia's attempts to evade our sanctions. We also see intelligence about what Russia needs to continue its war in Ukraine, 

Norah O'Donnell: And so how much time do you spend in the SCIF?

Wally Adeyemo: So-- I will spend sometimes hours a day in the SCIF—

Norah O'Donnell: Hours? Hours a day? 

Wally Adeyemo: Yeah-- And the secretary and I will spend-- do a few meetings in there a week together with the te-- team to review our progress ac-- across a number of issues.

The deputy secretary told us limiting Russia's supply of everything from microchips to ball bearings has made a difference on the battlefield.

Norah O'Donnell: take me behind the scenes about how you know that the sanctions that you have and other countries have imposed is really having an effect 

Wally Adeyemo: I won't tell you about any intelligence that I've seen. But I can tell you Russia's top tank producers have shut down their operations and they've made this public because they can't get the equipment that they need.

U.S. and allied sanctions have taken a significant toll on Russia's military, but CBS News has learned some of the cruise missiles that Russia launched in attacks on the Ukrainian capital of Kyiv on November 23 were made in Russia just weeks earlier.   

Norah O'Donnell: Does that suggest that Russia is evading some of these sanctions that you're crafting right here at the Treasury Department?

Janet Yellen: So I don't know the details on these missiles. I would say that-- Russia's ability to supply its military has been very significantly eroded by the sanctions and the export controls.

Starting this past week, the G7, which includes the U.S. and the European Union, plus Australia agreed to a price cap of $60 a barrel on Russian oil.

The elaborate plan, eight months in the making, came together just as Europe placed a ban on the importation of Russian oil, raising fears of a price spike that would hit a continent already suffering from high energy prices.

Norah O'Donnell: What does this price cap on Russian oil do? What's the goal?

Janet Yellen: The first goal is to limit the revenue that Russia receives. And we wanna make sure that they don't get windfall profits. But the second goal is one that concerns Americans and countries all around the world, and that is we wanna keep Russian oil flowing because Russia is a significant supplier of oil to the markets. So, those are our two goals, suppress Russian revenue, make it more difficult for them to fight the war, and keep global prices in a moderate range, and avoid spikes. 

Norah O'Donnell: That's a pretty delicate balance.

Janet Yellen: It is. it's new. The price cap only went into effect at the beginning of this week. But I would say so far, so good. 

Norah O'Donnell: The American people have committed $38 billion to military aid to Ukraine An additional $13 billion in direct aid to prop up the Ukrainian economy How long can that support in billions of dollars continue for Ukraine?

Janet Yellen: for as long as it takes.


The U.S. Treasury was set up to finance another war, the war of independence against Great Britain, before the U.S. even existed. It is the oldest departmental building in Washington where as the 78th secretary, Janet Yellen made history. 

Janet Yellen: (LAUGH) I am the first woman.

Norah O'Donnell: Ah. So this is your office.

Janet Yellen: This is my office.

Yellen enjoys a personal connection to another treasury secretary who once made history himself.

Janet Yellen: This is another portrait of Hamilton. 

Norah O'Donnell: And you actually went to Hamilton High School in Brooklyn--

Janet Yellen: I-- I did. I went to Fort Hamilton High School. It was named after Hamilton, of course.

Norah O'Donnell: And did you ever think that, "I would follow in his footsteps?"

Janet Yellen: I never-- certainly never thought of it at the time. I didn't even know that I would study economics.

She was born in Bay Ridge, Brooklyn. After graduating from Brown University, the secretary earned a Ph.D in economics from Yale in 1971. She was the only woman in her class. The notes she took as a teaching assistant are passed down by graduate students to this day.

More than half a century later, this past Thursday, we followed Secretary Yellen to Fort Worth, Texas, to see the first dollar bills with her signature go into production.  

Janet Yellen: Oh my gosh. Oh that's fantastic. That's wonderful. I'm so excited, that's just great. 

This Bureau of Engraving and Printing plant is part of Treasury and one of only two sites in the nation that print American currency. $2 trillion worth is currently in circulation worldwide, most of it, printed here.

Yellen's signature on the new dollar

This occasion marked the first time in the nation's nearly 250 year history that the two signatures on the dollar – U.S. Treasurer Lynn Malerba and Secretary of the Treasury Janet Yellen – were both signed by women. 

Janet Yellen: I wish my parents were alive to see this. I think they would find it very exciting. 

Norah O'Donnell: You've had many firsts. The first female head of the Fed, the first female head of the U.S. Treasury. And now to see your name on these dollar bills, what does that mean?

Janet Yellen: Well, I'm immensely honored by it but you know our currency is really about our values and our sense of ourselves as a nation. And they signify a sound economy, a strong financial system, and a country that's able to produce currency that, really, is a standard around the world.

Produced by Keith Sharman. Associate producer, Roxanne Feitel. Broadcast associates, Eliza Costas and Olivia Rinaldi. Edited by Warren Lustig.

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