Sen. Elizabeth Warren (D-Mass.) on Sunday said she is “very worried” that the Federal Reserve will “tip this economy into a recession” after Chairman Jerome Powell announced the bank would keep raising interest rates in an effort to combat inflation.
Warren told CNN’s “State of the Union” co-anchor Dana Bash that raising interest rates does not help alleviate problems with the economy caused by supply chain disruptions and exacerbated by the war in Ukraine.
“I am very worried about this,” the senator said. “There is nothing in raising the interest rates. Nothing in Jerome Powell’s toolbag that deals directly with those, and he has admitted as much in congressional hearings when I’ve asked him about it.”
During a keynote speech in Jackson Hole, Wyo., Powell said the Federal Reserve is focused on bringing inflation down and will keep raising interest rates in an effort to tame the 40-year high inflation rate.
In July, the Federal Reserve raised interest rates by 75 basis points following the same hike in June.
Leading economists have expressed concern about the Fed’s ability to lower inflation while not triggering a recession, with a majority in one survey expecting a recession sometime next year.
Warren said that while inflation is high, the nation has seen strong job growth and low unemployment numbers. That could change amid more interest rate hikes, she said.
“Do you know what’s worse than high prices and a strong economy?” she asked Bash on CNN. “It’s high prices and millions of people out of work. I’m very worried that the Fed is going to tip this economy into recession.”
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This story was originally published August 28, 2022 10:25 AM.