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Senator Warren worries that Fed will tip U.S. economy into recession

Published 08/28/2022, 09:35 AM
Updated 08/28/2022, 06:00 PM
© Reuters. FILE PHOTO: U.S. Senator Elizabeth Warren (D-MA) gestures as Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing on the "Semiannual Monetary Policy Report to the Congress", on Capitol Hill in

© Reuters. FILE PHOTO: U.S. Senator Elizabeth Warren (D-MA) gestures as Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing on the "Semiannual Monetary Policy Report to the Congress", on Capitol Hill in

By Kanishka Singh

WASHINGTON (Reuters) -Democratic U.S. Senator Elizabeth Warren said on Sunday that she was very worried that the Federal Reserve was going to tip the nation's economy into recession and that interest rate hikes would put people out of work.

"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 am very worried that the Fed is going to tip this economy into recession," Warren told CNN on Sunday.

The U.S. central bank's chief, Jerome Powell, warned on Friday that Americans were headed for a painful period of slow economic growth and possibly rising joblessness as the Federal Reserve raises interest rates to fight high inflation.

Powell said in a speech on Friday the Fed will raise rates as high as needed, and would keep them there "for some time" to bring down inflation that is running at more than three times the Fed's 2% goal.

"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain," Powell had said in his speech.

"What he calls 'some pain' means putting people out of work, shutting down small business because the cost of money goes up because the interest rates go up," said Warren, whose views on the economy are often influential among progressive Democrats.

© Reuters. FILE PHOTO: U.S. Senator Elizabeth Warren (D-MA) gestures as Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing on the

Warren said inflation was high partly due to supply chain problems, the COVID-19 pandemic and the war between Russia and 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," Warren said.

Latest comments

US printed more than 40,000 billions $ since 1980's. Result must be the huge inflation. Actualy liberal globalist capitalism is dead. Covid 19, "breaks" in the supply chains, NATO war against Russia in Ukraine are masks for enriching a small group of people. Their media is there to hide it.
Agreed the UN and world economic forum has hijacked the democracy and taking freedom away from people. The common masses are filled and totally oblivious to their one world government agenda. The media has totally brainwashed people and they brush it off as a conspiracy theory.
The fed wouldn't have had to do it so quickly if they didn't pass an unneeded bill last year. and then they doubled down on stupid with new one and student loans.
An unneeded bill? You sound like you have no idea what you are talking about.
On Trump's misbehaving with classified documents, his latest stunt to attract negative attention: it goes to show that LACK OF EDUCATION (as we know from Trump) goes a long way in a person tending towards ONGOING IGNORANCE, with no remedy in sight, or simply, as in Trump's case, a HOPELESS ignorant. --
This witch is saying all inflation is comes from FR's fault, but at the same time Democrat is doing pouring gasoline into inflation like student loan. She must shame about herself. Sticky historical inflation is with us, and not go far someday. Everybody knows The only way to catch inflation is rates hike and qt, but she is lying to people for coming election. Does she really worry about inflation? Then, Why she vote to those student loan, so called money spread budget? What a Shame of her.
The fed obviously struggles with basic math.. True inflation is 15% or higher..
and you are basing that on what?  Trump University math?
Boy, she's really on the Warpath. Oops...sorry about that.
This Democrat is lying to people and put all inflation responsibility and side effect to FR. The problem of more aggressive inflation is Democrat's policy, like pouring gasoline to fire, student loan etc. please shut up. FR will do their job whatever you say.
you have to know what you are talking about before you can lie about it. I'm not sure she qualifies enough on the former to be able to do the latter
oddly enough I agree with her. Raising interest rates crushes supply just as much as it does demand, if not more so and that will result in a recession before it ever diminishes inhalation
is it the Democrat's policy that's causing the very same inflation in Europe, Asia, South America as well???
Mrs? Do you worry about inflation and recession? Then stop student loan immediately for make it sure to win the inflantion war. You are talking illogical base, super high inflation is reality. then FR should do nothing?
I didn't read the article after reading the heading. I don't understand why a politician like Warren attracts attention on the issue. Does she want to bring her name out for publicity? Doesn't she have her hands full with important stuff? Or is it the media purposefully MISINTERPRETING her small and hushed inklings in order to drive a story? I mean, it's really a no-brainer that Powell wants to ********RAMPANT inflation and dampen it to say, half of the difference. IMO the media blew an average comment out of proportion to attract sales revenue. -- End.
The Media...blowing things out of proportion...just to sell newspapers?  Oh my, when did this start? The Media always looks for the Worst headlines. Reuters, The NY Times, Washington Post - no different than the National Enquirer.
Fake Pocahontas has no clue about basic economics. Historically After Every inflation comes recession.
So let's put the blame on the Fed after they put this country in this incredible mess. This is the cost of socialism dear Liz. WAKE UP.
Whatever she says is always the most ridiculous option.
Leave the Fed interest rate alone.
maybe congress should enact removing Fed's goal of stability of prices as a goal, keeping the only goal of maintaining economic growth. if so, they are not allow to jack up the interest rate now. The problem solved.
Giving free money and crying on FeD
its the wealthy white collar work force that has her as their lawyer, not the middle class. middle class people like me lost our jobs in the 2011 recession and deliver pizzas for a living. we don't buy $800k houses. that's what's caused us to Tipp over into insane inflation.
she is an utter ******
Arent we in recession by def
no worries we just change the definition of recession..... sincerely demrats
And Warren is under Wall Street's influence. Get rid of Warren xD
libs destroy every time they're in power. it's their goal, if you don't depend on them they can't rule over you
Maybe she should stop spending all our tax dollars on junk. Of course typical liberal taking no accountability
We are already there genius. And it will get worse
So ironic that we're in this mess because of the leftist policies that dumped free money into the economy.  Remember, she wanted even MORE stimulus: bigger checks, more child care credits, and extended Federal unemployment booster.  How bad would inflation be now if she got her way?  It was the Republican governors that forced the end of the free UE benefits, all while she and Bernie were criticizing them
She demanded the fed kept printing money - then complains when this cheap money causes inflation which hurts people's living. How exactly does she think companies can hire or grow when there is no one left to hire without offering higher wages?? Which results in even higher inflation...
Nope. I beg to differ. The cost of escalating prices are due to the Russian conflict and the prices of oil.. That's what causes inflation.
 Nonsens. See core inflation.
Thats weird. Guess all that inflation prior to the russian war was just magic.
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