“As the Fed tightens policy, a recession remains a risk,” said US Treasury Secretary Janet Yellen late Thursday.

The policymaker also added, “It is not appropriate to debate the 2% inflation target at this time.”

US Treasury Secretary Yellen also said that to ease Consumer Price Index (CPI), consumer spending may need to slow.

Market reaction

Yellen’s comments fail to move a needle in the markets amid the usual inactive hours of early Asian session on Friday. However, the support for the recession woes can add strength to the US Dollar and may exert downside pressure on the EUR/USD pair, while also allowing the Gold bears to occupy the driver’s seat.

Also read: EUR/USD pullback jostles with 1.0950 as central banks, Fed Powell propel US Dollar, PMI in focus