Warren Warns Powell That Fed's Rate Hikes Could Drive US Economy 'Off a Cliff'

[AZProgressive]

Sen. Elizabeth Warren on Wednesday told Federal Reserve Chair Jerome Powell directly that the central bank's recent decision to enact more aggressive interest rate hikes in an effort to combat inflation could push the U.S. economy "off a cliff"—and throw millions of people out of work—without reining in soaring prices.

"Inflation is like an illness and the medicine needs to be tailored to the specific problem, otherwise you could make things a lot worse," Warren (D-Mass.) said during her remarks at a Senate Banking Committee hearing. "Right now, the Fed has no control over the main drivers of rising prices."

Powell conceded the latter point under questioning from the Massachusetts Democrat, who asked whether the Fed's interest rate hikes are expected to have any impact on gas and food prices—two of the principal drivers of inflation.

"I would not think so, no," Powell said in response to Warren's question on whether rate hikes will cut gas prices.

https://www.commondreams.org/news/2022/06/22/warren-warns-powell-feds-rate-hikes-could-drive-us-economy-cliff?utm_term=Autofeed&utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#Echobox=1655939105

[maxsolomon]

1. Is the Fed supposed to have control over Food & Gas prices?

Sometimes I'm perplexed by Warren.

The era of 0% prime/easy money had to end, sooner or later.

[Scrivener7]

3. That, I think, is why he is instituting them.