Yellen shifts tone and says global outlook improving

The global economy is in a better place today than many predicted months ago, U.S. Treasury Secretary Janet Yellen said Thursday, while reiterating her calls for support to Ukraine on the eve of the first anniversary of Russia’s invasion.

Yellen’s comments, delivered at a press conference in Bengaluru, India, where finance ministers and central bank governors from the Group of 20 countries are gathering through Saturday, highlight a shift in tone on the global economic outlook from the last time the world’s top policymakers met in October.

“The challenges we face are real, and the future is always uncertain. But the outlook has improved since we gathered in the fall,” Yellen said.

Her comments come just a few weeks after the International Monetary Fund said it saw a “turning point” for the global economy and raised its growth outlook for the first time in a year.

At home, Yellen pointed to a resilient U.S. economy, where headline inflation has moderated over the past few months and the labor market remains strong.

On the global front, she stressed the importance of being attentive to “the spillovers of macroeconomic tightening” from major economies to the rest of the world. Yellen noted signs of declining headline inflation across the globe, but stressed “there’s much more work to do.”

Speaking a day before the first anniversary of Russia’s invasion of Ukraine, Yellen also reiterated the U.S. administration’s readiness to continue sending billions of dollars in aid for the Eastern European country as it battles Russian aggression and missile attacks.

The U.S. has provided over $46 billion in security, economic and humanitarian assistance to Ukraine and expects to provide around $10 billion in additional economic support over the coming months, Yellen said. Financial aid, used to support critical public services and help keep the government running, is one of several ways in which the U.S. and its allies are helping Ukraine.

She also called for the IMF to move swiftly toward a fully-financed program for Ukraine, and said that continued, robust support for Ukraine will be a major topic of discussion during her time in India.

“Our twin goals are to degrade Russia’s military-industrial complex and reduce the revenues that it can use to fund its war,” she said.

Yellen’s spotlight on the war in Ukraine is at odds with G-20 host India’s efforts to downplay the conflict during the group’s deliberations. Indian officials guiding the event are going so far as to seek avoiding the word “war” in any joint statement that concludes the meetings.

The U.S. Secretary also cautioned against countries that help Russia evade sanctions, saying the administration would continue to make clear to the Chinese government and to companies and banks in their jurisdiction about what the rules are regarding such sanctions and the serious consequences they would face for violating them.

“We have made clear that providing material support to Russia or assistance with any type of systemic sanctions evasion would be a very serious concern to us,” Yellen said.