Sen. Elizabeth Warren expressed clear concern Sunday about the Federal Reserve’s push to counter inflation on CNN’s “State of the Union.”
“What’s worse than high prices and a strong economy is high prices and millions of people out of work,” Warren said to host Dana Bash. “I’m very worried that the Fed is going to tip the economy into recession.”
Warren was responding to a statement from Jerome Powell, chair of the Federal Reserve, who said this week that the Fed would take forceful actions on inflation — including by raising interest rates. Inflation has spiked in recent months, though price increases have slowed as energy prices have started to come down.
In a speech Friday, Powell said these measures could cause “some pain” to households and businesses.
“What he calls ‘some pain’ means putting people out of work, shutting down small businesses, because the cost of money goes up, because the interest rates go up,” Warren said in her response.
Powell’s plan does not address what Warren labeled as the root causes of inflation, including the ongoing impacts of Covid, supply chain issues and the war in Ukraine.
“There is nothing in raising the interest rates, nothing in Jerome Powell’s tool bag, that deals directly with those. And he has admitted as much in Congressional hearings,” the Massachusetts Democrat said.
Powell’s brief speech at the Fed’s annual conference Friday was highly anticipated; he suggested at the same gathering last year that inflation would be temporary.
His reappointment split progressives at the beginning of President Joe Biden’s administration.
