US Treasury Secretary Janet Yellen discusses China cyber hack, COVID’s inflation role, and US Steel merger controversy

US Treasury Secretary Janet Yellen discussed several critical issues, including a significant cyber attack attributed to Chinese state-sponsored actors, its impact on US-China relations, and its potential ramifications. Yellen also touched on the role of COVID-related stimulus spending in contributing to inflation, offering insights into the current economic landscape. Additionally, she provided clarity on the controversial blocking of the US Steel-Nippon Steel merger, defending the thorough review process while refraining from commenting on the ongoing legal dispute.

Cyber attack by Chinese state-sponsored actors

Yellen expressed significant concern over a recent cyber attack on US Treasury workstations, attributed to Chinese state-sponsored actors. Calling the attack a "tremendous concern," Yellen emphasized that it was detrimental to US-China relations. She said, “It's not something that builds confidence in our relationship, and we will and have taken action against perpetrators of cyber attacks from China and other countries.”

Yellen revealed that she raised the issue during a virtual meeting with Chinese Vice Premier He Lifeng earlier this week. She also mentioned that the Treasury would be briefing US lawmakers about the attack.

Pandemic stimulus and inflation

During the interview, Yellen was asked about the role of US government stimulus in inflation during the COVID-19 pandemic. While acknowledging that supply chain issues and shortages were the main drivers of rising prices, she conceded that stimulus spending could have contributed to inflationary pressures. “The labor market has cooled but is in a good state,” she noted, adding that recent US economic data suggested that interest rates could remain higher than anticipated.

US Steel merger

Yellen also touched on the controversial blocking of Nippon Steel's acquisition of US Steel. She clarified that the merger had undergone a “thorough analysis” by the Committee on Foreign Investment in the United States (CFIUS), which is tasked with reviewing foreign investments for potential national security risks. Yellen explained, “CFIUS did analyze the specifics, as it always does of this situation, and prepared a thorough analysis to go to the president.”

However, she refrained from commenting on the ongoing litigation related to the blocked merger, which has sparked a lawsuit alleging that the review was prejudiced. “There is ongoing litigation over this case, and as head of CFIUS, I regret there is very little substantive that I can say to you about this,” she added.

Yellen's comments come at a critical time as the US continues to navigate a complex global landscape marked by economic challenges and national security concerns. The Treasury Secretary's remarks on cyber security, inflation, and corporate mergers highlight the ongoing efforts to address both domestic and international issues impacting the US economy.