US Senator Elizabeth Warren (D-Mass.) discussed inflation and interest rate increases by the US Federal Reserve (Fed) in an interview with CNN's State of the Union Sunday.

Senator Warren Worried That Fed Rate Raises Will Push US Into Recession

Warren commented on the Chairman's speech Fed Jerome Powell at Jackson Hole on Friday (August 26).

“While higher interest rates, slower growth and more dovish labor market conditions will reduce inflation, they will also bring some hardship to households and businesses. These are the trade-offs of reducing inflation. But failure to restore price stability will bring much greater pain.”

"Things Jerome Powell just said, 'some pain', as I understand it, means putting people out of work, closing small businesses because of rising costs and interest rates."

Answering the question whether the Fed continues to raise interest rates is a mistake or not, Warren emphasized:

"I'm very worried about this."

Warren went on to list “the causes of inflation – apart from the Covid pandemic still crippling parts of the economy around the world, we are still having supply chain problems, a crisis The ongoing war in Ukraine is driving up the cost of energy, and corporate giants are helping to push prices up even further.”

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She emphasized:

“Nothing changes as interest rates go up, nothing in Jerome Powell's toolkit can directly address these status quo and he admitted in congressional hearings when I ask".

“You know what's worse than high prices and a thriving economy? That's escalating costs and millions of people unemployed. I'm very worried that the Fed will push this economy into a recession."

A survey by the US National Association for Business Economics released last week showed that 72% experts predict the US economy will shrink by the middle of next year. Meanwhile, nearly one in five (19%) surveyed economists said the economy had fallen into recession.

Another survey by Stifel Financial found that 97% US corporate executives, business owners and private equity investors surveyed believe that the US economy is already in a recession. 18%) or will face a recession within the next 18 months (79%).

Some people think that inflation has peaked, including CEO of the . Meanwhile, JPMorgan CEO Jamie Dimon said there could be something worse than a recession coming.