Treasury Secretary Janet Yellen told CBS News that the spectacularwhich shocked the crypto world with its bankruptcy filing last week, should serve as a warning to Americans to invest their money in “extremely risky” financial products traded in a space lacking “proper oversight and regulation.”
FTX, one of the world’s largest cryptocurrency exchanges, collapsed in just one week, and both the company and its former CEO Sam Bankman-Freed are currently under investigation in the US and other countries for possible security breaches. While the effects of the FTX crash were largely limited to the crypto finance markets, Yellen has joined a growing chorus of experts and officials around the world suggesting that the digital currency industry should be subject to greater regulation.
“I think this is where investors and consumers need to be very careful,” Yellen told CBS News correspondent Nancy Cordes in an extensive interview in Bali, where the treasury secretary attended the G20 summit with President Biden. She is
“We have very strong investor and consumer protection laws for most of our financial markets, but in some ways the crypto space has inadequate regulation.”
Yellen said the Biden administration pointed to “regulatory holes that need to be filled for this to become a space where Americans can feel safe doing business” and blamed “lack of proper oversight and regulation” for the collapse of FTX.
Yellen stressed that she is not in a position to give Americans specific advice on how they should or should not invest their money, but called cryptocurrencies “extremely risky assets and even dangerous in some ways” and urged people to “be extremely careful.” about their activities in this space.
FTX’s lenders will be first in line for any assets a bankruptcy judge sees fit to distribute as the company seeks to restructure as part of its Chapter 11 filing. Investors in the Bahamas-based company, which has raised about $2 billion in venture capital, will be second. queue. This means that FTX account holders who have used the platform to trade bitcoin, solans and other digital currencies may have to.
“Strong, resilient economy” against inflation
The Treasury chief described the U.S. economy as a whole as strong and resilient and said she expects inflation to ease in the coming year, with plenty of jobs offered to Americans, but she warned that the global picture remains “uncertain.”
“Many countries do suffer from high energy and food prices, and we have these strains ourselves, but we have a strong, resilient economy,” Yellen told Cordes, calling the U.S. labor market “exceptionally strong.”
“We continue to create jobs at a very fast pace. Unemployment is at a near 50-year low and there are two jobs for every American job seeker,” she said, citing economic conditions for the country’s households, banks and businesses. big solid body.
“I expect inflation to come down over time, and Americans are rightly concerned about that, but I believe they will feel better,” she said.
Diesel “shortage and low stocks”
One thing that could work against a recovery in U.S. inflation this winter is limited supplies of diesel fuel, which is used both to heat buildings and to move just about everything Americans buy around the country. Diesel powers the majority of freight trains and trucks, and global fuel shortages have seen prices rise by more than 40% over the past year, and they continue to rise.
A major U.S. supplier’s warning of a “shortage” of fuel on the east coast earlier this month sparked speculation that the fuel might even run out.
While U.S. diesel inventories are lower than since 1982, energy market expertsand the US wasn’t about to run out—at least not in the coming weeks, and only if the global supply chain didn’t completely break down.
Yellen shared this optimism, but cautiously. Asked by Cordes if there is enough diesel in the U.S. to get through the winter, she said “I hope I believe there will be”, but acknowledged that there will be “some shortages and low stocks” on the East Coast.
“Hopefully we don’t see further growth – prices have risen and we’re monitoring the situation very closely,” she told Cordes, adding that the Biden administration has “talked to the oil companies about this.”
Switching to electric vehicles “depending on China”?
President Biden has spoken extensively about his goal of having half the cars on US roads run on electricity instead of fossil fuels by 2030, but the Pentagon recently cited China’s dominance of the electric vehicle (EV) battery market as a major challenge to that. Target.
Most of the raw materials used to make lithium-ion car batteries come from China, and Yellen acknowledged that the US and its auto industry have “relied on China” so far.
The finance minister saidapproved by Congress over the summer “contains incentives and regulations that are designed to change that and diversify our battery component supply chains.”
“They are very strong incentives for investment in these minerals in the United States and other allies, so we are giving it a lot of attention,” Yellen said, adding that starting next year, companies that assemble electric vehicles in North America are “committed to buy about 40% of minerals or mineral processing from the United States or other countries with which we have free trade zones, so I expect that over time this will change and we will become less dependent on China.”
Christopher J. Brooks and Megan Cerullo of CBS MoneyWatch contributed to this report.