Washington D.C. – During his Congressional appearances this week, Federal Reserve Chairman Jerome Powell declared interest rates are ‘likely to be higher’ than previously expected despite the growing toll repeated rate hikes have already taken on the economy, including slowing wage growth and declining demand in the U.S. manufacturing sector. The Chairman faced sharp questioning by lawmakers on why he intends to ramp up rates further when the Fed’s own economists admit it will cost millions of jobs and bring about a recession; see video highlights below.
The Fed Chair struggled to answer why a recession and mass layoffs is a price worth paying for higher interest rates that fail to address what’s really driving up prices – rampant corporate profiteering and greed.
Liz Zelnick, Accountable.US’ Director of Economic Security and Corporate Power.
- Senator Elizabeth Warren: “Chairman Powell, you are gambling with people’s lives. And there’s a pile of data showing that price-gouging, and supply-chain kinks and the war in Ukraine are driving up prices. You cling to the idea that there is only one solution: lay off millions of workers. We need a Fed that will fight for families.”
- Warren continued: “According to the Fed’s own report, if you continue raising interest rates as you plan, unemployment will be 4.6 percent by the end of the year – more than a full point higher than it is today. Chair Powell, if you hit your projections, do you know how many people who are currently working, going about their lives, will lose their jobs? … It’s in your report. That would be about 2 million people who would lose their jobs, people who are working right now making their mortgages.”
- Senator Sherrod Brown: “It’s so brazen. Even global bankers called on the Fed to identify this profiteering as one of the biggest drivers of inflation. … [These companies] have taken advantage of circumstances to expand profit margins.”
- Congresswoman Ayanna Pressley: “In this paper, the Fed’s own economists predict that reaching the 2 percent inflation goal that you have said will be impossible without causing a recession and spiking the unemployment rate to 7.4 percent, which translates to millions of working people losing their jobs. Chairman Powell, many economists agree with me when I say that engineering a recession to bring inflation under control is not the right strategy, especially at a time when we’re seeing inflation cool in real time independent of your rate hikes.”
- Senator Chris Van Hollen: “Would you agree that changes in the size of corporate profits can be one of the factors that affects the inflation rate?” Chairman Powell: “Yes.”
MORE FROM ACCOUNTABLE.US:
- Top Economic Experts And Prominent Voices Warn Interest Rate Hikes Could Backfire
- CBO Projects Layoffs and “Halt” in Economic Growth as Result of Fed’s Aggressive Interest Rate Hikes
- Watchdog: Big Food Industry’s Profiteering Binge Unphased By Fed’s Repeated Job-Killing Interest Rate Hikes
- The Fed’s Own Economists Find Corporate Overcharging Is Driving Inflation, Yet Fed Officials Fixated On More Job-Killing Interest Rate Hikes