Treasury Secretary Janet Yellen said the U.S. can afford supporting two countries — Israel and Ukraine — simultaneously.
According to the U.S. Treasury, Yellen was asked by Wilfred Frost, a reporter at U.K. broadcaster Sky News, about the ability to afford aid, given “the weakest fiscal position” since World War II. “Can America or can the West afford another war at this time?” asked Frost.
Yellen: “I think the answer is ‘absolutely.’ America can certainly afford to stand with Israel and support Israel’s military needs, and we also can and must support Ukraine in its struggle against Russia. Look, the American economy is doing extremely well. Inflation has been high, and it has been a concern to households. It has come down considerably, at the same time, we have about the strongest labor market we have seen in 50 years with 3.8% unemployment.”
The White House is seeking Congressional funding to aid both countries, which has been difficult given the House of Representatives at the moment cannot agree on a speaker. National-security adviser Jake Sullivan said on CBS’s “Face the Nation” that the cost of the aid it’s seeking would be “significantly higher” than $2 billion.
Yellen’s remarks come as investors have staged something of a buyer’s strike on U.S. Treasurys, with bond auctions including that of a 30-year note
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seeing tepid demand last week. Growing budget deficits have been cited as one reason for the recent bond yields, alongside Federal Reserve quantitative tightening as well as its interest-rate hike campaign.
The Congressional Budget Office said last week that the federal budget deficit was $1.69 trillion in the September-ending fiscal year, up from $1.38 trillion the previous year. Revenue fell 9% while outlays fell by only 1%.
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