US Treasury Secretary Yellen: OPEC+ oil production cut will add uncertainty to global growth outlook

“A surprise OPEC+ oil production cut is an ‘unconstructive act’ that will add uncertainty to the global growth outlook and to burdens on consumers at a time of high inflation,” US Treasury Secretary Janet Yellen on Monday per Reuters.

"I think it's a regrettable action that OPEC decided to take. I'm not sure yet just what the price impact will be. I think we need to wait a little longer for, you know, to really assess that," Yellen told reporters after an event at Yale University.

Additional comments

Clearly, it's not a positive for global growth.

And it adds to uncertainty and burdens at a time when inflation is already high and holding prices down is a top priority.

A reduction in gasoline prices from last year's peaks had helped limit inflation and it would be detrimental if the trend were reversed.

Asked about the impact of the $60 per barrel price cap on Russian crude oil imports that Western allies imposed, she said she did not view the OPEC+ production cut plan as a significant factor to "have any impact on the appropriate level of the cap.

Coalition countries could revisit the price cap level if a change was deemed appropriate, ‘But I don't see that that's appropriate at this time.’

I want to withhold judgment now on just what impact this will have on oil prices, although I know there's been some reaction today," she said of the OPEC+ move.

Deposit outflows from small and medium-sized banks were diminishing, but I was watching the situation closely and was ‘not willing to allow contagious runs to develop’ in the US banking system.

Confidence in the banking system was strengthened by actions taken by the Treasury, Federal Reserve and Federal Deposit Insurance Corp after the failures of Silicon Valley Bank and Signature Bank.

My read is that outflows from smaller and medium-sized banks are diminishing, and matters are stabilizing, but it's a situation we're watching very closely.

We've focused on a range of issues including financial, risks and have not put all of our focus on climate risks.

I don't think there's a fundamental problem with the banking system.

Also read: Forex Today: Markets remain upbeat despite OPEC+ surprise output cut; RBA next