“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.
“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.
“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.”