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Former Fed chair warns coronavirus could throw the US into recession

Former Fed chair warns coronavirus could throw the US into recession
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Janet YellenJanet Louise YellenWaPo reporter: Treasury continuing recovery plan amid complaints of labor shortage, inflation Business groups target moderate Democrats on Biden tax plans On The Money: How demand is outstripping supply and hampering recovery | Montana pulls back jobless benefits | Yellen says higher rates may be necessary MORE, who served as the first chairwoman of the Federal Reserve from 2014 to 2018, said on Wednesday that the concerning spread of the coronavirus across the world could put the U.S. economy on a path toward recession.

"We could see a significant impact on Europe, which has been weak to start with, and it’s just conceivable that it could throw the United States into a recession,” Yellen said in Michigan, Bloomberg reports.

“If it doesn’t hit in a substantial way in the United States, that’s less likely. We had a pretty solid outlook before this happened — and there is some risk, but basically I think the U.S. outlook looks pretty good," she added.

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Talking at a Brookings Institution event in Clinton Township, Mich., Yellen also reportedly said that factory closings in mainland China, where the disease originated, will affect supply chains for companies that rely on products from there and cause a decrease in consumer spending.

Stocks opened with steep losses Thursday morning as investor fears of the virus spreading grow. The Dow Jones Industrial Average formally entered a correction.

President TrumpDonald TrumpVeteran accused in alleged border wall scheme faces new charges Arizona Republicans to brush off DOJ concern about election audit FEC drops investigation into Trump hush money payments MORE announced Wednesday evening that he is putting Vice President Pence in charge of the U.S. response to the novel coronavirus, saying his administration is "very, very ready for this."

“The number one priority from our standpoint is the health and safety of the American people,” Trump, standing next to Pence, said at the White House.