BlockBeats News, June 12th, former U.S. Treasury Secretary and former Federal Reserve Chair Janet Yellen stated at the 2026 Oriental Asset Management Global Investment Forum in Paris that the rationale for recent interest rate cuts in the United States has "largely disappeared," and the current inflation and macro uncertainty have significantly constrained monetary policy space.

Yellen pointed out that the U.S. economy is currently facing a triple supply-side shock: price pressure from tariffs, energy disruptions from the Middle East situation, and rising electricity costs driven by artificial intelligence investment. These factors combined are expected to keep inflation persistently above the Fed's target in the near term.

She also warned that the U.S. federal government's debt level is underestimated by the market, and the combination of debt burden and rising interest rates is increasing fiscal vulnerability. She stated that the U.S. fiscal policy trajectory is "unsustainable," with interest payments now surpassing defense spending, and the long-term Treasury market may face risk reassessment.

Regarding growth, Yellen believes the labor market still shows resilience, but changes in inflation expectations are the key variable for monetary policy. Although the possibility of rate hikes in the short term is low, in the current environment, "the rationale for recent rate cuts has disappeared," and the market is readjusting its rate path expectations.