Elizabeth Warren slams the Fed for risking 'pushing our economy off a cliff': 'There is a big difference between landing a plane and crashing a plane'

Elizabeth Warren slams the Fed for risking 'pushing our economy off a cliff': 'There is a big difference between landing a plane and crashing a plane'
Fed Chair Jerome Powell, Sen. Elizabeth WarrenChip Somodevilla/Getty Images, Kevin Dietsch/Getty Images
  • Sen. Warren slammed the Federal Reserve for risking "pushing our economy off a cliff."
  • She disagreed with the Fed's strategy to aggressively hike interest rates to fight inflation.

Massachusetts Sen. Elizabeth Warren continues to blast the country's central bank for its inflation-fighting tactics.

On Wednesday, Warren delivered a speech on the role Democrats should play in helping the economy during EconCon, a convention co-hosted by progressive groups like Demos and the Economic Security Project Action.

She emphasized the need for Democrats to accomplish as much as they can during the lame duck session, or the time between now and when Republicans take control of the House. Her focus was on eliminating the debt ceiling and the Federal Reserve's role in managing soaring prices in the country.

Warren, who has been outspoken on her opposition toward Fed Chair Jerome Powell, previously said that his aggressive interest rate hikes to combat inflation could lead to a recession, and therefore, a stream of job losses. The Fed most recently hiked interest rates by 0.75 percentage points — the fourth consecutive time doing so at that scale — and Warren said they are acting too aggressively and risk hurting Americans.

"Of course the Fed has a role to play in getting inflation under control, but there is a big difference between landing a plane and crashing it," Warren said.


"Powell risks pushing our economy off a cliff," she added. "And who will be most likely to lose their jobs? Not stock brokers and investment bankers. Nope. The people out of work will be low-wage workers and those already struggling most with rising prices. The Fed needs to slow down on these extreme rate hikes and remember its dual mandate of price stability and maximum employment. The jobs and livelihoods of millions of Americans hang in the balance."

It's a concern other Democratic lawmakers like Senate banking chair Sherrod Brown have shared, as well. Ahead of the Fed's announcement of interest hikes this month, Brown warned Powell that continuing the aggressive strategy to fight inflation could end up doing more harm than good.

But, as Insider previously reported, lower interest rate hikes could be on the horizon as the economy continues to recover from the pandemic. The Consumer Price Index, which measures inflation, rose 7.7% year-over-year in October, which was a slowdown from the previous 8.2% measurement, and the US added 261,000 payrolls in October, showing that the labor market continues to be strong.

These promising economic conditions suggest the economy could either avoid a recession altogether, or enter a growth recession, defined as a shallow contraction that keeps a strong labor market, meaning the country wouldn't feel the pain of a full-blown economic downturn.

Fed Vice Chair Lael Brainard noted during a discussion hosted by Bloomberg this week that "it probably will be appropriate soon to move to a slower pace of increases."


"By moving forward at a pace that's more deliberate, we'll be able to assess more data and be better able to adjust the path of rates to bring inflation down," she said.