Not even Sen. Elizabeth Warren (D-MA) is denying any longer that the Biden economy is a disaster.
The socialist progressive confessed to CNN that she fears a recession could be on the horizon, Fox Business reported.
Warren told CNN’s State of the Union that the Federal Reserve’s effort to bring crippling inflation down by raising interest rates could lead to a recession, a common concern shared by many economists and everyday Americans.
“Do you know what’s worse than high prices and a strong economy? It’s high prices and millions of people out of work. I’m very worried that the Fed is going to tip this economy into recession,” she said.
Of course, many fear a recession has already begun. The Fed’s aggressive monetary tightening has fueled a tumble in the housing market, which has led to speculation of a repeat of the 2008 crash that devastated the middle class.
Warren said that the Fed’s rate hikes don’t address fundamental drivers of inflation like COVID-related supply chain disruptions and the war in Ukraine.
“There is nothing in raising the interest rates, nothing in Jerome Powell’s tool bag that deals directly with those, and he has admitted as much in congressional hearings when I’ve asked him about it,” she continued.
Powell warns of “pain”
Of course, Warren failed to mention her own party’s role in driving inflation up in the first place with trillions in reckless spending and COVID lockdowns that throttled supply chains. President Biden has continued the spending spree with the recently signed Inflation Reduction Act.
Despite its title, the law lavishes billions of dollars on fighting climate change and is not expected to make a meaningful impact on prices.
Meanwhile, Fed chair Jerome Powell warned in a speech Friday that more “pain” is coming for American consumers as the central bank tries to get inflation under control.
“While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” he said. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
The White House was blasted for trying to change the meaning of the term “recession” in July after the economy shrank for two consecutive quarters, the classic definition of a recession. No less than CNN reports that 72 percent of economists say a recession has either begun or is coming soon.