WASHINGTON – Sen. Elizabeth Warren on Sunday hit out at the Federal Reserve’s plan to fight inflation, saying she was worried the central bank would push the US economy into recession.
“Do you know what’s worse than high prices and a strong economy?” Massachusetts Democrat asked on CNN’s “State of the Union.” “It is a high price and lakhs of people are out of work. I am very concerned that the Fed is driving the economy into recession. ,
Warren renewed his criticism of Fed Chair Jerome Powell’s monetary tightening policies, saying he does not believe rising interest rates can add to current inflationary pressures.
“Like the fact that COVID is still shutting down parts of the economy around the world, that we still have supply chain kinks, that we still have a war going on in Ukraine that drives up energy costs. It is,” Warren said. “There’s nothing raising interest rates, nothing in Jerome Powell’s toolbag that’s directly related to them.”
Powell signaled in a much-anticipated speech Friday in Jackson Hole, Wyoming, that the Fed was going to continue its aggressive series of interest rate hikes, and set rates as a strategy to try to spur demand and bring inflation under control. Going to keep high for the time being. , He warned of slow growth and “some pain” for homes and businesses to get there.
Warren said his comments indicated jobs would be lost and small businesses would suffer.
Fed officials and their European counterparts, who have been dealing with high inflation for decades, are pushing against suggestions that they will reverse course if their economy falters while price pressures remain too high.
Atlanta Fed President Rafael Boustik told Bloomberg television last week that the economy must first weaken before inflation subsides, and that such a change would require the Fed to keep rates at a generally high level for 18 months to two years. will be required.
An analysis by the Federal Reserve Bank of New York found that much of the US pandemic-era inflation came from an increase in demand and a move from services to goods, but supply chain constraints such as labor shortages and logistical constraints made it worse. and extended.