“I am very concerned about this because 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 our supply chain kinks, that we still have an ongoing war in Ukraine that drives up the cost of energy, and that We still have these giant corporations involved in price gouging,” Warren told CNN reporter Dana Bash on “State of the Union.”
“Nothing in the rate hike, nothing in Jerome Powell’s toolkit, who deals directly with those, and he admitted that in congressional hearings when I asked him about it,” the senator continued, adding, “Do you know what’s worse than a hike? Prices and a strong economy? It’s high prices and millions of people are out of work.”
“I am very concerned that the Fed is going to push this economy into a recession,” said Warren, who earlier this year opposed reappointing Powell to lead the Fed.
“While high interest rates, slow growth, and weak labor market conditions will bring inflation down, they will also cause some pain to households and businesses,” he said.
Like Warren, Wall Street also reacted negatively to the tone of Powell’s speech, as leading indicators of the potential for continued interest rates and the associated economic pain slipped — a word that Powell referred to twice in his brief speech, referring to the slower. Growth, high unemployment and financial stress will inevitably tighten policy on American homes 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,” she told Powell. “I hope you think about that before you push this economy off the cliff.”
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