Sen. Elizabeth Yellen (D-Mass) said to Federal Reserve chair Jerome Powell that not to push to the economy towards recession with interest rate hikes. She said Powell must be careful in this matter.
At Senate Banking Committee hearing on Wednesday Yellen talked about how the interest rate hikes to help cope with growing U.S. prices could carry the economic system off a cliff.
Last week, the Fed raised its interest rates by three-quarters of a point that is the biggest hike since 1994.
The move-in interest rates hike was supposed to decrease inflation by making it more costly to borrow money, while it raised serious concerns regarding the slowdown of financial activities.
Janet Yellen-Treasury Secretary also shared her views that economic activity will get slow. While she also thinks that recession is unavoidable.
Yellen said to Powell, that every medicine must be according to the illness. Inflation is also like an illness and medicine must be according to the specific problem, otherwise, things will get worse.
She said, Fed has no control over the main drivers of inflation yet, but Fed is trying to decrease demands by getting a lot of people fired and making families poorer.
Yellen asked Powell what could be worse than low unemployment and inflation and then answered that high inflation and millions without jobs. She said I hope you realize that before driving the economy off a cliff.