“I’m very concerned about this because the causes of inflation – things like Covid continuing to shut down parts of the economy around the world, that we still have supply chain issues, that we still have a war going on in Ukraine that’s driving up the cost of energy, and that we still have these giant corporations that are price gouging,” Warren told CNN’s Dana Bash on “the state of The union”.
“There’s nothing in raising interest rates, nothing in Jerome Powell’s toolkit, that deals directly with them, and he admitted that in congressional hearings when I told him. asked about it,” the senator continued, adding, “Do 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 worried that the Fed will tip this economy into recession,” said Warren, who earlier this year opposed Powell’s renomination as Fed head.
“While higher interest rates, slower growth and looser labor market conditions will reduce inflation, they will also hurt 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 prolonged period of higher interest rates and associated economic pain – a word Powell invoked twice. in his brief speech, referring to slower rates. the growth, rising unemployment and financial strains that tighter policy will inevitably affect American homes and businesses.
“You know what’s worse than high inflation and low unemployment? It’s high inflation with a recession and millions out of work,” she told Powell. “I hope you think about that before you knock this economy off a cliff.”