Elizabeth Warren, a senator from the state of Massachusetts in the United States, has expressed “serious worry” on the possibility that the Federal Reserve may lead the economy into a recession. She gave an explanation that stated, “There is nothing in hiking the interest rates, and there is nothing in Jerome Powell’s tool bag that deals directly with” the factors that contribute to inflation.
Inflation and the Federal Reserve’s Decision to Raise Interest Rates, According to Senator Elizabeth Warren
During her presentation on CNN’s State of the Union on Sunday, United States Senator Elizabeth Warren (D-Massachusetts) talked about inflation as well as the Federal Reserve’s decision to raise interest rates.
She began by offering her thoughts on the speech that the Chairman of the Federal Reserve, Jerome Powell, had given the previous day in Jackson Hole. “While higher interest rates, slower growth, and softer labor market conditions will bring inflation down, they will also bring some pain to consumers and companies,” Unfortunately, these are the sacrifices that must be borne in order to bring inflation under control. However, if we are unable to get prices back to where they should be, we will be in for much more suffering,” Powell stated.
The senator from Massachusetts stated, “I would like to translate what Jerome Powell just said,” and he went on to do so. “What he called’some pain’ implies putting people out of work and shutting down small firms because the cost of money goes higher and interest rates go up,” In response to a question on whether or not she believes it is a mistake for the Federal Reserve to continue increasing interest rates, Warren emphasized the following:
She then went on to list “The causes of inflation, such as 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 the cost of energy, and that we still have these giant corporations that are engaging in price gouging.”
Senator Elizabeth Warren placed emphasis on the following question as she continued: “Do you know what’s worse than high prices and a booming economy? It’s not just the exorbitant pricing; it’s also the fact that millions of people are without jobs. I have a great deal of concern that the Federal Reserve will be the factor that brings about a recession in this economy.
72% of economists questioned by the National Association of Business Economics anticipate that the economy of the United States would be in a recession by the middle of the next year, according to the results of a survey that was published just last week. According to the results of a poll conducted by the National Bureau of Economic Research, nearly one in five economists, or 19 percent, believe that a recession is already underway in the current state of the economy (NBER).
A different survey conducted by Stifel Financial indicated that 97% of corporate executives, business owners, and private equity investors in the United States asked stated that the economy of the United States is either already in a recession (18%) or will experience one over the next 18 months (79%). There are others who believe that inflation has reached its maximum level, and one of these individuals is Elon Musk, CEO of Tesla. In the meantime, Jamie Dimon, the chief executive officer of JPMorgan, stated that there is a possibility of “something worse” than a recession occurring in the near future.