Yellen’s UN week agenda: Food prices, climate change and global aid

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Ronda Churchill | Bloomberg | Getty Images

WASHINGTON — Treasury Secretary Janet Yellen outlined an ambitious agenda on Monday to address key factors of the global economic recovery only weeks before a potential U.S. government shutdown over congressional funding disputes.

“We have an initiative to enable the World Bank and the other multilateral development banks to greatly expand their provision of resources and to mobilize private capital for climate change,” Yellen told CNBC’s Sara Eisen in an interview.

Speaking from the United Nations General Assembly in New York City, the Treasury secretary added that Russia’s continued war with Ukraine is putting a strain on global food prices, especially after its July exit from the Black Sea Grain Initiative, which had allowed Ukrainian grain exports to safely transit via Black Sea ports.

“Russia’s continuing, brutal war in Ukraine is having a very adverse impact,” Yellen said. “And we’re spending time this week discussing food prices and what we can do to alleviate hunger and shortages of food.”

Yellen also said the Biden administration is closely monitoring gas prices to ensure affordability for Americans. Oil prices rose to their highest level of the year last week, prompting some experts to predict that crude oil might reach $100 a barrel by the end of the year.

“My expectation is that they will stabilize, but we’ll just keep an eye on it,” she said of oil prices.

China’s growth after ending Covid pandemic-related lockdowns, though slower than expected, is a contributor to the lift in oil prices, said Yellen. But its weakened economy, along with Germany’s, was driving her focus on the global economy at the UN event.

The Treasury secretary also said a potential U.S. government shutdown could risk the momentum of the domestic economy, which is on the upswing, according to recent indicators. The producer price index in August increased a seasonally adjusted 0.7%, the biggest single-month increase since June 2022. The core PPI stayed in line with estimates.

“There’s absolutely no reason for a shutdown and we want Congress to do its work of funding the government and keeping it open,” said Yellen. The deadline for Congress to pass a continuing resolution to keep the government open is Sept. 30.

Yellen spoke a day after two key voting blocs in the House Republican caucus reached a tentative agreement on a partisan bill to fund the government until the end of October, in exchange for cuts to domestic spending and stricter border controls.

Yet within hours of announcing the deal, more than a half-dozen far-right conservatives in the House rejected the compromise, making it difficult to see a path by which such a bill could pass with only GOP votes, given the party’s razor thin majority in the House.

Despite the looming threats at home and abroad, Yellen was optimistic about the U.S. economy and the American labor market.

“I don’t see any signs that the economy is at risk of a downturn,” Yellen said. “And this is the best of all worlds, to see continued strength in the economy, a good strong labor market and inflation moving down. And that is what we’re seeing.”

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