Janet Yellen says the US economy will slow but avoid a recession while gas prices are unlikely to come down soon

• The US will avoid a recession but the economy will slow, Treasury Secretary Janet Yellen said.
• She remained optimistic on consumer spending, a strong labor market, and investment.

Treasury Secretary Janet Yellen doesn't think the US economy will fall into a recession but warned gas prices won't fall from record-highs in the near future.

She also said at a New York Times DealBook event Thursday that economic growth will cool off as the Federal Reserve tightens monetary policy.

"I don't think we're [going to] have a recession. Consumer spending is very strong. Investment spending is solid," Yellen said on Thursday.

Yellen's comments preceded another climb in inflation on Friday, with the US consumer price index climbing 8.6% year over year in May, the highest rate since 1981.

A key factor in inflation has been rising fuel costs, and the average gallon of gas in the US has climbed to a record high of $5, according to GasBuddy. Meanwhile, AAA data shows the national average on Friday is $4.986, but is expected to follow GasBuddy data and tick above the $5 mark soon too.

Yellen said President Biden had done all he can do thus far to tame skyrocketing gas prices, pointing to record inventory drawdowns from the Strategic Petroleum Reserve.

But she acknowledged that prices probably won't fall in the near term and that Americans are worried about the costs of filling up their cars.

"It's unlikely that gas prices are going to fall anytime soon," Yellen said.