Yellen also discussed the US's economic relationship with China, warning against over-reliance on China in sectors like clean energy. While she does not advocate for a complete decoupling, she believes the US needs to "derisk" its relationship with China. She praised recent US investments in sectors with national security implications, such as semiconductors, and warned against abandoning domestic semiconductor manufacturing.
Key takeaways:
- Treasury Secretary Janet Yellen is optimistic that the rapid progress in AI could significantly boost the U.S. economy's productivity.
- Yellen emphasized that gains from AI would come amid a rise in U.S. investment in other areas, backed by three major spending bills from the Biden administration: 2021’s infrastructure bill and the CHIPS and Science Act and Inflation Reduction Act, both from 2022.
- Despite economic challenges, Yellen expressed optimism for the U.S. economic outlook and the possibility of a 'soft landing' for the economy.
- Yellen highlighted the need for the U.S. to 'derisk' its relationship with China, particularly in sectors like clean energy and semiconductors, where the U.S. has become overly reliant on China.