$NVIDIA (NVDA.US)$ WASHINGTON: Treasury Secretary Janet Yell...

$NVIDIA (NVDA.US)$ WASHINGTON: Treasury Secretary Janet Yellen says there are no “red lights flashing” for the financial system, and reiterates her view that the US economy has reached a soft landing even as job growth weakens.

“For the United States, the kinds of metrics that we would monitor that would summarise risks – whether it’s asset valuations or a good degree of leverage – things look good, I don’t see red lights flashing,” Yellen said last Saturday during a fireside conversation with Bloomberg News’ David Gura at the Texas Tribune Festival.

“I’m attentive to downside risks” on employment, she said, while saying job growth is solid.

The Treasury chief spoke a day after US equities capped the biggest weekly sell-off since the March 2023 regional banking crisis – roiled by a weaker-than-expected gain in payrolls that stoked concern the Federal Reserve will prove late to begin lowering interest rates.

The S&P 500 Index slid more than 4% over the week.

“While there are risks, it really has been amazing to be able to get inflation down as meaningfully as we have” while maintaining strong growth, Yellen said in Austin.

“This is what most people would call a soft landing.”

Yellen highlighted “wages going up at a decent clip,” surpassing the pace of inflation, along with the lack of any mass layoffs.

Monthly job gains are at about the level needed to absorb new entrants to the labour market, she said.

The August jobs release showed US hiring fell short of forecasts, with non-farm payrolls rising 142,000.

The three-month average hit the lowest since mid-2020, according to Bureau of Labour Statistics data, but the unemployment rate edged down to 4.2% – the first decline in five months, reflecting a reversal in temporary layoffs.