Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Sen. Elizabeth Warren questions bankers during a Senate hearing

Sen. Elizabeth Warren (D-Mass.) questions executives of the nation's largest banks on September 22, 2022 in Washington, D.C. (Photo: Drew Angerer/Getty Images)

With Most Dems Silent, Warren Slams Fed for Pushing US Toward Painful Recession

"Throwing Americans out of work with a recession is not the solution to fight inflation," wrote Sen. Elizabeth Warren.

Jake Johnson

Despite the massive stakes for the U.S. and global economy, most congressional Democrats have thus far shied away from vocally criticizing the Federal Reserve over its potentially recession-inducing approach to fighting inflation.

Sen. Elizabeth Warren (D-Mass.) is one prominent exception.

"Powell has said that the Fed's rapid interest rate hikes will bring 'pain' for working families."

On Thursday, following the release of Labor Department figures showing that inflation rose again in September even after a series of aggressive interest rate hikes by the Fed, Warren wrote on social media that "throwing Americans out of work with a recession is not the solution to fight inflation."

The Massachusetts Democrat's message, hardly her first pointed critique of the central bank's actions, echoed warnings from economists that Fed Chair Jerome Powell's campaign to bring down inflation by crushing demand is likely to push the U.S. economy into recession—and possibly bring the rest of the world with it.

Warren noted in her tweet Thursday that Powell himself has conceded interest rate hikes will hurt workers and businesses while doing nothing to push down key drivers of inflation, which has been fueled by supply-chain snags, Russia's war on Ukraine, corporate profiteering, and other factors out of the Fed's control.

"Chair Powell has said that the Fed's rapid interest rate hikes will bring 'pain' for working families and even admitted it won't lower food or gas prices," the progressive senator wrote.

Powell's admission came during an exchange with Warren at a Senate Banking Committee hearing in late June, a week after the Fed enacted its largest rate hike in nearly three decades.

A month after that hearing, Warren penned a scathing Wall Street Journal op-ed cautioning that the Fed's decisions risk "triggering a devastating recession" and leaving "millions of people—disproportionately lower-wage workers and workers of color—with smaller paychecks or no paycheck at all."

Despite concerns from Warren, outside experts, and the Fed's own economist, the U.S. central bank has enacted two additional 75-basis-point rate hikes since June, and it is widely expected to impose another large increase during its upcoming November meeting.

The Fed's own projections indicate that its effort to rein in inflation could throw 1.5 million U.S. workers out of their jobs by next year.

While the Labor Department's topline inflation figure remains stubbornly high, the Fed's rapid tightening of financial conditions is having a noticeable impact on the U.S. economy, particularly in the housing market. This week, the average 30-year fixed mortgage rate hit a 20-year high of 6.92%—a development that has the perverse effect of pushing more people into the rental market, driving up prices there.

Hiring has also begun to slow and jobless claims have risen for two consecutive weeks, heightening concerns that the Fed has already overdone the rate hikes and secured a painful economic downturn.

But as both progressive and conservative economists sound the alarm, Democratic lawmakers and Biden administration officials—including President Joe Biden himself—have largely been quiet about the Fed's policy moves.

As Politico reported earlier this week, "there's been little public criticism among Democrats in Congress—even though they're the ones most likely to pay a political price if soaring interest rates send the economy into a recession."

"In interviews with key lawmakers on Capitol Hill, House and Senate Democrats mostly responded to Powell's campaign to quash inflation with resignation and a note of caution," the outlet noted. "Few have been willing to admonish him—including in multiple hearings."

"I don't have a lot of thoughts on what the Fed does," Sen. Sherrod Brown (D-Ohio), chair of the Senate committee that oversees the Fed, told Politico. "We have no control over that."

Powell was originally nominated to lead the Fed by former President Donald Trump. Late last year, ignoring pressure from climate advocates and some progressive lawmakers to replace him, Biden renominated Powell for another term, and the Senate confirmed him in an overwhelming vote of 80-19.

Warren was among the lawmakers who voted against confirming Powell, as was Sen. Bernie Sanders (I-Vt.), who has joined the Massachusetts Democrat as one of the few vocal Fed critics in Congress.

"No, Chairman Powell. At a time when real weekly wages are lower today than they were nearly 50 years ago, the problem is not that wages and employment are too high," Sanders wrote on Twitter last week, referring to Powell's stated effort to "get wages down."

"The problem is that corporations are making record profits by jacking up prices," Sanders added. "We need a windfall profits tax."


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.

'Cleaner Air Is Coming' as London Expands Vehicle Pollution Fee to Entire Metro Area

"Around 4,000 Londoners die prematurely each year because of long-term exposure to air pollution, with the greatest number of deaths in outer London boroughs," noted Mayor Sadiq Khan in announcing the expansion.

Brett Wilkins ·


'Amazing News': Historic Shark Protections Approved at Global Wildlife Convention

Up to 90% of sharks targeted by the lucrative fin trade will now be protected, said one advocate.

Julia Conley ·


'The Nightmare Materializes': Far-Right Extremist Itamar Ben-Gvir to Be Israel's National Security Minister

The Foreign Affairs Ministry of the Palestinian Authority said Ben-Gvir's elevation to national security minister could have a "catastrophic impact on the Israeli-Palestinian conflict."

Jake Johnson ·


Raging Wars, Soaring Hunger Put Women and Girls in Crosshairs, Warns UN

"A toxic mix of crises—conflicts, climate, skyrocketing costs, and the ripple effects of the Ukraine war—are inflicting a devastating toll on the forcibly displaced. This is being felt across the world, but women and girls are particularly suffering."

Brett Wilkins ·


Greta Thunberg Joins 630+ Young People in Landmark Climate Lawsuit Against Sweden

"The Swedish state fails to meet the constitutional requirement to promote sustainable development leading to a good environment for present and future generations," said the plaintiffs.

Julia Conley ·

Common Dreams Logo