The risk of recession is “not completely off the table,” Yellen said in an interview with CBS’s Face the Nation broadcast Sunday. Monthly job growth is slowing as expected after holding at a “high level,” she said from Beijing after meeting with Chinese leaders.

“We have a healthy economy, a great labor market, inflation too high and a concern of ours and the American people, but coming down over time,” Yellen said. “And it’s my hope that, and belief, that there is a path to bring inflation down in the context of a healthy labor market. And the data that I’ve seen suggests we’re on that path.”

President Joe Biden said last month he thinks the US will avoid a recession. “It’s been coming for 11 months, well guess what? I don’t think it is going to come,” he told Democratic Party donors on June 27.

Bloomberg Economics sees a baseline scenario for a US recession to begin toward the end of 2023, coinciding with a moderate slowdown in consumption, according to a June 30 analysis.

Inflation in the US likely continued to soften in June, but a key measure of underlying price pressures is still running at an uncomfortable pace that keeps the Federal Reserve tilted toward resuming interest-rate hikes this month.

A government report Wednesday is forecast to show the consumer price index climbed 3.1% from a year ago, the smallest annual rate since March 2021. With volatile energy and food costs are stripped out, core CPI is seen rising 5% from a year ago. While that would be the smallest annual increase since late 2021, it’s still more than double the Fed’s goal, based on a different inflation metric.

Fed Bank of Chicago President Austan Goolsbee said Friday that policymakers are on a “golden path” to ease price growth without triggering a recession in the world’s biggest economy, as data that day showed a slowdown in what remains a strong labor market.

US non-farm payrolls increased 209,000 last month — less than economists expected — and job gains over the prior two months were revised lower. The unemployment rate fell to 3.6%, while average hourly earnings rose 4.4% from a year earlier.

Goolsbee said the consensus of almost all FOMC participants is for one or two more hikes this year, which he said could come at any of the upcoming meetings in the second half of the year. The next policy decision will be July 26.

Yellen was on a four-day visit to Beijing, where she described talks with her Chinese counterparts as helping to bring bilateral relations closer to a “surer footing.” Spiraling tensions between the US and China have led to a tit-for-tat trade war and escalating restrictions over key technologies like chips.

Yellen told CBS that while President Joe Biden’s administration was mulling added controls on outbound investments, they would be “very narrowly targeted” and not significantly impact bilateral investments with China. 

She said she raised in Beijing the issue of China’s latest move to restrict exports of two metals crucial to the chipmaking industry and reopened channels of communication that could be used to discuss concerns.