Senator Warren fears Fed could plunge US economy into recession

U.S. Senator Elizabeth Warren (D-Massachusetts) announces that Federal Reserve Chairman Jerome Powell will address the Senate Banking Committee on the Semiannual Monetary Policy Report to Congress at Capitol Hill in Washington, DC, U.S. Gestures while testifying at the hearing of the Commission on Housing and Urban Affairs. , 22 June 2022. REUTERS/Elizabeth Frantz/File Photo

WASHINGTON (Reuters) – Democratic Senator Elizabeth Warren said on Wednesday she was very worried the Federal Reserve would plunge the U.S. economy into recession and that rate hikes would put people out of work. said.

Warren told CNN, “You know what’s worse than high prices and a strong economy? I am very worried,” he said.

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.read more

In his Friday speech, Powell said the Fed would raise rates as much as necessary and keep them going “for a while” to bring down inflation, which has been more than three times the Fed’s 2% target.

“Higher interest rates, slower growth and a weaker labor market will lower inflation, but they will also bring some pain to households and businesses. These are the unfortunate costs of lower inflation. But price stability. “It would mean a lot more if we couldn’t recover the ‘pain,'” Powell said in his speech.

“What he calls ‘some pain’ means putting people out of work, raising interest rates and increasing the cost of money, and closing small businesses,” Warren said.

Warren said inflation was high due to 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.

Reported by Kanishka Singh, Washington. Edited by Lisa Shumaker and Alistair Bell

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