WASHINGTON — Senator Elizabeth Warren said on Sunday that she is very worried that the Federal Reserve is pushing the country’s economy into recession and that rate hikes will put people out of work.
“You know what’s worse than high prices and a strong economy? Prices are high and millions of people are out of work. It’s not like the Federal Reserve is going to put this economy into recession. I’m very worried about it,” Warren, a Massachusetts Democrat, told CNN on Sunday.
US Central Bank Governor Jerome Powell said on Friday that Americans are headed for a painful period of slower economic growth and possibly higher unemployment as the Federal Reserve raises interest rates to combat high inflation. I warned you.
In his Friday speech, Powell said the Fed would raise rates if necessary and keep them going “for the time being” to bring down inflation, which has more than tripled the Fed’s 2% target.
“Higher interest rates, slower growth and a weaker labor market will lower inflation, but will also bring some pain to households and businesses. A failure to recover would mean much more pain,” Powell said in his speech.
“What he calls ‘pain’ means putting people out of work, raising interest rates and the cost of money, and closing small businesses,” Warren said.
Warren said inflation was high, in part because of supply chain problems, the Covid-19 pandemic and the war between Russia and Ukraine.
“There’s nothing directly related to rate hikes, nothing in Jerome Powell’s tool bag, and he’s admitted the same in congressional hearings,” Warren said.