Treasury Secretary Yellen Holds Press Conference at the 2024 IMF and World Bank Fall Annual Meetings

Bank for hosting these meetings and all of you for attending. Today I'd like to start by stepping back and speaking about how far we've come. Three years ago when I attended my first annual meetings as Treasury Secretary, the COVID-19 pandemic was raging, many of the events were virtual, the IMF had just revised downward its projections for global economic growth due to continued supply chain disruptions and new COVID variants. Today the situation is very different. Though progress across economies has been uneven, the global economy has proven resilient. America's strong economic performance is leading the way as a key engine of global growth. At home, thanks to the Biden-Harris administration's economic agenda, we went from millions having lost their jobs to an historic labor market recovery. Unemployment is near all-time lows and US real wage growth is outperforming that of most other advanced economies. US economic growth has also been almost twice as fast as most other advanced economies this year and last, even as inflation came down sooner. As a recent Brookings analysis puts it, the US is significantly outperforming its peers. We're now working to sustain this momentum, including through major investments in infrastructure, advanced manufacturing, and clean energy that other countries have sought to emulate. This morning the IMF again upgraded its forecast for the US outlook, as it did in 2023 when US growth ultimately came in at almost double the IMF's projection earlier that year. Our administration has also been focused beyond our borders from day one. We rejected isolationism that made America and the world worse off and pursued global economic leadership that supports economies around the world and brings significant benefits to the American people and the US economy. We will further this approach this week, including by together continuing to respond to global conflicts. For more than two years, the coalition we formed in the immediate aftermath of Russia's invasion of Ukraine has stood strong. Our naval price cap on Russian oil has restricted Russia's revenues while keeping energy markets well supplied. We continue cracking down on Russian sanctions evasion, and as soon as next week we will unveil strong new sanctions targeting those facilitating the Kremlin's war machine, including intermediaries in third countries that are supplying Russia with critical inputs for its military. We've also been working tirelessly to unlock the economic value of the Russian sovereign assets mobilized in our jurisdictions to support Ukraine. The United States is also using all the tools at our disposal in response to the conflict in the Middle East. We've worked to hold the Iranian regime accountable for its destructive behavior across the region by sanctioning terrorist actors including Hamas, the Houthis, and Hezbollah, with over a thousand Iran-related sanctions since 2021 and multiple rounds of designations in recent weeks. Earlier this month we took additional decisive action to intensify pressure on Iran in response to Iran's attack on Israel, expanding sanctions to target Iran's effort to channel revenues from its energy industry to finance deadly activities. And we're more broadly focused on doing what we can to increase stability in the region, including by working to ensure that legitimate aid flows reach Gaza, imposing sanctions on Israeli violent extremist settlers, and pressing Israel to maintain vital correspondent banking relations with Palestinian banks. We look forward to the Israeli cabinet extending the waivers to preserve correspondent banking relationships for banks in the West Bank by the end of the month deadline to support economic stability in the West Bank. This week we'll maintain our focus not only on taking decisive action in response to conflicts but also on addressing challenges that threaten to hold back global growth, such as emerging markets and developing countries facing significant debt vulnerabilities and a desperate need for investments in infrastructure and clean energy. One of many devastating impacts of Russia's war on Ukraine has been the spike in food insecurity. So we worked with partners to support the launch of the International Financial Institution action plan to address food insecurity, and we've seen it deliver results. IFIs increased lending to the food and agriculture sector by 60% following Russia's invasion and maintained that level of support through 2023. We now affirm President Biden's commitment to reduce hunger and generate jobs by increasing investment in food systems, and will continue to work with the IFIs to move this work forward. To strengthen health systems, as the current mpox outbreak underscores, remains urgent. We continue to support the Pandemic Fund, which has now allocated funding to projects in more than 40 countries across all regions. Confronting climate change of course also remains at the top of our agenda. The MDBs committed a record high of nearly $75 billion in climate finance to low- and middle-income countries in 2023, a 45% increase from 2021, and they're deploying new tools to help countries respond to crisis and increase resilience. We will continue to work to make climate finance easier to access and to support additional private capital mobilization at the MDBs and through the Climate and Environment Trust Funds. There we should turn to implementing the recommendations of the recently finalized review of the climate finance architecture that we worked with G20 partners to launch. And we've made significant progress putting conflict and fragility, pandemics, and climate change at the core of the MDB work through the evolution agenda. The MDBs have responsibly stretched their balance sheets and pursued innovative financial measures that will enable $200 billion in additional lending capacity over the next 10 years. And as of July, the G20 estimates that measures that have already been identified could enable an additional almost $160 billion. This nearly $360 billion in total would be an annual increase of over 20% compared to 2023. Let me end by emphasizing that all of the investments we make in food security, global health, climate, and more won't deliver results if many low- and middle-income countries are devoting more resources to debt service than to spending on development priorities. We've made progress to strengthen our institutions to address these issues. We reached an historic agreement on a 16th General Review of Quotas at the IMF, which will increase IMF quotas by 50% so that it can continue playing its crucial role at the center of the global safety net. And we've approved capital increases at the EBRD and IDB Invest. But we need to do more. As we look ahead, our administration will keep pushing to further improve the Common Framework to quickly get support to countries in debt distress, calling for an IDA replenishment with a financing package and policy priorities that meet the needs of low-income countries, and implementing the Nairobi-Washington Vision that President Biden and President Ruto launched in May so that countries with strong policy frameworks facing liquidity stress receive the financing support they need to realize their sustainable development ambitions. Many of the challenges we face cannot be solved overnight, but I'm convinced that this sustained American economic leadership and engagement with partners we first restored and then strengthened over the past three and a half years will be indispensable as we move forward. I look forward to furthering this approach this week as we celebrate the 80th anniversary of the Bretton Woods institutions. Thank you, and I'm now happy to take your questions.

I'm not prepared to spill out the details of the actions that we'll take likely next week, other than to say that our approach has been to identify Russian or third country entities and individuals who are working to help Russia acquire the materials that it needs for its military activities in Ukraine. And you should expect that some entities of that sort, such intermediaries, will be designated. And as you mentioned, we've also significantly in recent months strengthened our sanctions so that we can now designate and sanction financial institutions in third countries that we see working to facilitate payments that Russia makes to purchase the goods it's acquiring for military purposes. And we've already seen that this threat of secondary sanctions on financial institutions, which would mean that those institutions would be cut off from the US financial system if they deal with sanctioned entities, we're seeing that that already is having a significant effect. So further actions of that type remain high on our radar screen as well. You mentioned the $50 billion loan that the G7 leaders agreed to provide to Ukraine and asked me about the status of it. We're very close to finalizing America's portion of this $50 billion loan package. And what I want to emphasize is that the source of financing for these loans is not the American taxpayer. What's happening here is that Russia is paying for this support. The $50 billion of support that we intend to go to Ukraine by the end of this year, it is the income on the assets that have been immobilized, Russian sovereign assets that have been mobilized in Euroclear, that are the source of repayment. And we've agreed with Ukraine that even if there is a final settlement and a truce is reached, that it will be Russian funds that will go to repay these loans. So this is a way in which we're making Russia bear the cost and the expense of the damage that it's inflicting on Ukraine. I'll be meeting tomorrow with my Ukrainian counterpart and in particular expect to receive assurances that the profits from Russia's assets will pay back this loan. So I would say that we expect to be able to contribute $20 billion to the $50 billion G7 package, although there's just a little bit more work to do to finalize the details.

We have been very careful in our actions thus far to make sure that global markets are well supplied, and we do want to make sure that that remains the case. However, what we're seeing is even with this increase in hostilities in the Middle East, oil prices have declined, not risen. US oil and natural gas production has reached record levels. China's demand, given the reduction in its growth projections, has declined, and that's put some downward pressure on oil prices. And I believe there remains significant spare capacity in Saudi Arabia and other countries that could continue to keep oil markets well supplied, even if our actions with respect to Iran and Russia were to cause a decline in oil exports.