U.S. Treasury Secretary Janet Yellen stated on Thursday that labor market and inflation data indicate the U.S. economy is on track for a “soft landing.” However, she noted that the “last mile” in controlling inflation involves reducing housing costs.

In a live interview with CNBC, Yellen mentioned that according to Federal Reserve officials, the central bank’s benchmark overnight interest rate is expected to decline to a neutral policy level.

“I always believed that there was a path to a soft landing, that it was possible to bring inflation down while maintaining a strong labor market, and to me, that’s what the data suggests has happened,” Yellen said.

She also expressed optimism that housing costs would decrease.

Yellen emphasized the importance of U.S. deficit reduction to keep interest costs manageable over time. She added that the Biden administration considers it crucial to continue investing in sectors that will drive future growth.

Regarding financial system stability, Yellen assured that banks are well-capitalized. She acknowledged the turbulence caused by uninsured deposits in 2023, which led to deposit runs in some banks. She mentioned that significant efforts are being made to enhance liquidity and access to the Fed’s discount window for banks with uninsured deposits.

Yellen noted that any changes to bank deposit insurance limits are decisions for Congress, but banking regulators are exploring ways to ensure quick access to liquidity when needed.