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Yellen is attending talks in Paris on debt relief for low-income nations

A MARTÍNEZ, HOST:

U.S. Treasury Secretary Janet Yellen is in Paris this week, meeting with world leaders to try and ease the debt load of developing nations, particularly those coping with climate disasters.

JANET YELLEN: We have several goals to rally world leaders to take concrete actions with developing and emerging economies that will spur growth, address challenges that are global in nature, like climate change, pandemics, fragility and conflict, and to generally deepen economic ties.

MARTÍNEZ: I spoke with Secretary Yellen yesterday, and I asked her what it's going to take to make that happen.

YELLEN: We see a need - and this is a priority of ours at this summit - for the World Bank, the IMF and the multilateral development banks to play leadership roles here. And we think that they need to evolve in order to accomplish that. In the last eight months, we've achieved some significant success changing the way that they operate, and they've already agreed to changes that at the World Bank will unlock $50 billion in additional lending capacity over the next decade. The World Bank has always had a country-by-country focus, and a challenge like climate change is really a global challenge.

MARTÍNEZ: I also asked the secretary about U.S.-China relations.

The U.S. and China are doing what sometimes, I think, Secretary, seems and looks like it's a perilous, dangerous dance. But aren't the two economies too tied together for them to even think about decoupling?

YELLEN: Well, I think decoupling would be disastrous. Trade and investment - open trade and investment - I think is a win-win. But there are areas where we have concerns. We will certainly take actions, for example, to protect our national security. And we have put in place export controls, for example, on advanced semiconductors. We are concerned about overdependence on China. But the concern is broader if we have overdependence on any single country for critical goods that we need, whether it's equipment related to dealing with health threats like the coronavirus, or it's overdependence on goods like solar panels or rare earths or critical minerals that go into electric vehicle batteries. But I would refer to this as de-risking and not decoupling. We don't seek to sever our trade and investment relations with China. That wouldn't be desirable for us or for them.

MARTÍNEZ: One last thing, Secretary. Can Americans put recession to rest?

YELLEN: Well, I don't think Americans should anticipate that we have to have a recession. It is certainly not something that is inevitable. You know, the labor market is about as strong as it's ever been. That may be one source of inflationary pressure. But we can still see some of the pressure come out of the labor market. And this has already happened to some extent without seeing waves of layoffs or anything of the sort. So I believe that it is possible to avoid recession, to maintain a good, strong labor market while gradually bringing inflation down to the Fed's target.

MARTÍNEZ: That is U.S. Treasury Secretary Janet Yellen.

Secretary, thank you very much for the time.

YELLEN: Thank you. Transcript provided by NPR, Copyright NPR.

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