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Warren criticizes Jerome Powell for comments on interest rates: “I am very concerned that the Fed will lead this economy into recession”

“I’m very concerned about this because of the causes of inflation, things like the fact that Covid is still shutting down parts of the economy around the world, that we still have supply chain issues, that we still have a war going on. Ukraine”. that drives up the cost of energy, and that we still have these giant corporations that are out there driving up prices,” Warren told CNN’s Dana Bash on “State of the Union.”

“There is nothing in raising interest rates, nothing in Jerome Powell’s tool bag, that directly addresses that, and he has admitted that in congressional hearings when I have asked him about it,” the senator continued, and He added: “No. You know what’s worse than high prices and a strong economy? It’s high prices and millions of people out of work.”

“I’m very concerned that the Fed is going to drive this economy into a recession,” said Warren, who earlier this year opposed Powell’s re-election to lead the Fed.

Fears of a US recession have been building for weeks, with Warren’s comments coming just two days after Powell, the nation’s central bank chief, hinted at a possible recession during a speech at opening at the Federal Reserve’s annual Jackson Hole Economic Symposium. Powell told investors during his remarks that the Fed was laser-focused on inflation and would continue its historic pace of rate hikes for the foreseeable future.

“While higher interest rates, slower growth and softer labor market conditions will reduce inflation, they will also bring some pain to households and businesses,” he said.

Like Warren, Wall Street also reacted negatively to the tone of Powell’s speech, with major indexes falling on the prospect of a sustained period of higher interest rates and associated economic pain, a word Powell invoked twice in his speech. brief speech, referring to a slower economy. growth, higher unemployment and financial stress that tighter policy will inevitably affect American households and businesses.

Warren previously urged Powell to proceed cautiously with rate hikes and avoid triggering a recession that would cost millions of jobs, including at a Senate hearing in June, when he raised concerns about the impact of rate hikes. the Fed on families and the risk of a recession and issued a warning similar to the one it gave on Sunday.

“You know what’s worse than high inflation and low unemployment? It’s high inflation with a recession and millions of people out of work,” he told Powell. “I hope he considers that before he drives this economy off a cliff.”

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