Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Sen. Elizabeth Warren questions Fed Chair Jerome Powell

Sen. Elizabeth Warren (D-Mass.) questions Federal Reserve Chair Jerome Powell during a hearing on June 22, 2022 in Washington, D.C. (Photo: Nicholas Kamm/AFP via Getty Images)

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

"You know what's worse than high inflation and low unemployment? It's high inflation with a recession and millions of people out of work," Sen. Elizabeth Warren told Jerome Powell.

Jake Johnson

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.

Regarding food prices, the Fed chair provided a virtually identical answer: "I wouldn't say so, no."

Watch the exchange:

Last week, the central bank's Federal Open Market Committee voted unanimously to hike the benchmark federal-funds rate by 75 basis points, the largest increase in nearly three decades.

The Fed's latest rate hike came on the heels of a worse-than-expected inflation report showing that price increases accelerated in May as Russia's war in Ukraine raged on and supply chain issues stemming from the coronavirus pandemic persisted.

The central bank's pivot to larger rate hikes—which are aimed primarily at weakening demand—sparked warnings from economists that the Fed is on the verge of dramatically slashing investment, leading ultimately to slower growth, higher unemployment, and lower wages.

Warren echoed those warnings during Wednesday's hearing, saying that while the Fed can't cut gas or grocery prices with the blunt tools at its disposal, it can "slow demand by getting a lot of people fired and making families poorer."

"Rate hikes won't make Vladimir Putin turn his tanks around and leave Ukraine," Warren said. "Rate hikes won't break up monopolies. Rate hikes won't straighten out the supply chain, or speed up ships, or stop a virus that is still causing lockdowns in some parts of the world."

"You know what's worse than high inflation and low unemployment?" she continued. "It's high inflation with a recession and millions of people out of work. I hope you consider that before you drive this economy off a cliff."

Powell, for his part, acknowledged during his Senate testimony that the Fed's approach to tackling inflation could push the U.S. economy into recession.

"It's not our intended outcome at all," Powell said, "but it's certainly a possibility."


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

'The Problem is Corporate Greed, Boss': Bezos Blasted for Defense of Big Oil Price-Gouging

'Bezos scared," said one progressive economist after the world's second-richest person went to bat for Big Oil.

Jon Queally ·


Bodycam Footage Shows Ohio Police Shooting Jayland Walker 60+ Times

"The Department of Justice needs to step in to investigate immediately," said former Ohio state Sen. Nina Turner.

Common Dreams staff ·


'Impeach Justice Clarence Thomas' Petition Nears 1 Million Signatures

"He has shown he cannot be an impartial justice and is more concerned with covering up his wife's coup attempts than the health of the Supreme Court," reads the petition.

Jake Johnson ·


'Tipping Point of No Return' Feared as Amazon Rainforest Fires Surge

"Up to now, the Biden administration has only legitimized the Brazilian government's anti-Indigenous and anti-environmental agenda," said Greenpeace USA.

Jake Johnson ·


Biden Urged to Embrace Windfall Tax as Exxon Says Profits Doubled in Second Quarter

"It's time for the president to demand that Congress pass a windfall profits tax on Big Oil and use the revenue to provide rebates to consumers NOW!" wrote Sen. Bernie Sanders.

Jake Johnson ·

Common Dreams Logo