Sen. Elizabeth Warren (D-MA) joins CNN’s Jake Tapper to discuss the Federal Reserve’s decision to raise interest rates as it attempts to fight inflation. #CNN #News
Transcript
Call for an investigation of the Fed, arguing that Jerome Powell has failed. Now his defenders say the pandemic was a black swan event that sent the economy into a tailspin. And he has correctly read the labor markets ability to sustain full employment in the face of rate hikes. What do you say
To those who argue, who disagree with you and argue? POWELL Since this unprecedented cataclysmic economic event of the pandemic, that he’s actually done a decent job? Well, you know, if you want to treat this as a cataclysmic event, which certainly the pandemic was, keep in mind it drove inflation in ways
That are different from how we usually have it. So, for example, we have seen supply chain kinks that have driven up prices. Then add to that we have a war in Ukraine. And then one of the big pieces has been a lot of price gouging. We’ve seen these giant corporations, particularly in industries
That are very concentrated, really pushing their prices up. So there are three things that are helping push prices up. And do you know how many of those three can be affected by raising interest rates? None of them. The whole point is that Powell is using the one tool the Fed has,
And that is raise interest rates. But he has said himself in hearings, nope, it won’t affect any of those things. But here’s what it will effect. When the Fed uses language like we’re trying to cool the economy or slow down the economy, the translation behind that is we’re trying to increase unemployment. Right.
And in fact, the Fed has said this in the last hearing that I have with with Chair Powell, when we had him in front of us and the Finance Committee, I looked at the Fed’s own predictions, their report in December, in which they said, we want to keep
Trying to slow down the economy. And what we’re hoping for out of this is that we increase unemployment by 2 million jobs. Now, that’s a lot of people for whom that’s a lot of hurt. These are people right now who are paying the rent, putting groceries on the table.
They’re not and they’re not hiding this. They’re saying this. He said it today. I think more than a million jobs to be lost this year because of these rate hikes. That’s right. And actually, by the Fed’s own production, it’s more than 2 million. That is their target here.
And the point I want to make is that’s not going to help us on supply chain. It’s not going to help us on the war in Ukraine. It’s not going to help us on these the price gouging from these big corporations. So I think we ought to be not doing the
Extra ordinary, these extreme interest rate hikes. We’ve never seen hikes at this rate in the modern economy and bearing down harder on these other costs that are these other factors that are driving up. But you think Fed Chair Powell should be doing things about these other things are,
I think, what he should say. He should call, for example, for more on price gouging, but back off using his tool and keep trying to say that he’s going to keep using it until he puts 2 million people out of work. So a December Washington Post column said
That this is not the Warren presidency, but it’s certainly a Warren infused presidency, meaning that the president, President Biden, is taking a lot of your suggestions and trying to enact them into law. Have you ever directly told President Biden that you think you should fire the chair, fire Jerome Powell?
And who would you like to see replace him? So I’m not going to talk about private conversations, but what I will say is I’ve made it very clear as publicly as humanly possible that I didn’t think that he should be reconfirmed as president, as chair of the Fed. And I think he’s doing
A really terrible job, and he’s doing a terrible job on both fronts. Remember, there are two only two jobs for the Federal Reserve chair. One is monetary policy, inflation. I think he’s doing a very bad job there. And it’s risking pushing our economy into a recession. His other job is regulatory oversight,
And he has spent five years weakening regulations over these multibillion dollar banks. I predicted five years ago the consequence of that kind of weakening would be that we would see these banks load up on risk, build their short term profits, give themselves ginormous bonuses and big salaries, and then some of those banks
Will explode. And that is exactly what has happened. On Share. Powell what you just mentioned, the prospect of a recession. Do you think the United States is headed for a recession? I think that that is where Jerome Powell is trying to drive it. And he’s got two different ways because he’s purposely
Trying to drive it to a recession. Well, what he’s trying to do is get 2 million people laid off. And one of the things that we need to understand when he wants to raise the unemployment rate by more than a point within a single 12 month period.
We have done that before in this country. In fact, we have done it 12 times before. And out of all 12 times, how many times has it resulted in a recession? The answer is 12. So that’s the direction he’s trying to push this. That is a danger to our economy.
It’s why I said five years ago, I think he’s a dangerous man to have in this job. So CNN has exclusively obtained a letter written by you and six other senators after the collapse of the Silicon Valley Bank. You’re calling for the Fed to crack down on these large regional banks, arguing
That they cannot be left to supervise themselves. As you know, Powell is not the only banking regulator. It’s the Oxy, the S.E.C., FINRA, the the CFP, which you know a little bit about the FDIC, Treasury, in short, the Biden administration. Aren’t you are you pointing the finger too much at Powell
And not enough at President Biden in all the agencies and departments that he’s in charge? The one who is responsible on safety and soundness. That’s the part we want to go here. Is this financially solvent and stable bank? That’s what the Fed for all of these $50 billion and above banks.
And that’s where it is that Jerome Powell has spent years now weakening the regulations. In fact, I had him at a hearing not long ago in which I talked about the fact that he has weakened the regulations over these banks not once, not twice, but literally dozens of times.
And so I said to him, of all the things you’ve done for these banks and a lot of it’s way down in the weeds, can you name just one where you kind of tightened the regulations a little bit, where you increased oversight a little bit? His answer was no, no.
After the Silicon Valley bank failure, you sent a letter to the former CEO of that bank arguing that his lobbying to weaken the rules. I don’t know if you mean with Congress, which actually acquiesced. Yes. In 2018, but also or also with with him with Fed Chair Powell.
But but you said his lobbying is what enabled the collapse, and you asked him to submit answers to your questions by March 28th. It is not yet March 28th, I should note. Have you heard back? And what are you hoping? No, we have not. But this really is the reminder.
This is not a story that just one day fell out of the sky. This is a story that starts back with you remembers the last crash put Dodd-Frank in place, promised the American people, we’re going to have tough regulations and that means we’re not going to have any more bank failures
Then these multibillion dollar banks, including the CEO of the Silicon Valley Bank, come in and say, no, no, no. They want to be treated not like the multibillion dollar banks they are. They said we’re just like those little tiny local community banks that do such a great job
Of providing local loans and so on. So regulate us very lightly, they said, because they claimed they posed no risk to the economy. Now, Donald Trump then ran for president, saying to those banks, right, multibillion dollar banks, I will tighten regulations on you. Once he was elected, he put in regulators
Who believed in deregulation. Then he went to Congress and said to Congress, roll back the part of Dodd-Frank that requires more supervision over these $50 billion. And most Republicans went along with it. But also a bunch of Democrats, too. Yup. No. He got help from both parties.
And then what happened is that Jerome Powell said you’ve opened the door for much more deregulation. Massive deregulation. And he said he’s actually on the record saying this because you opened the door. I am now going to go full steam ahead and lighten the regulations. And then his
Then vice chair, who was Randy Quarrels, said that his job was to change the culture at the Fed in order to let these banks do what they wanted to do to be able to take on risk, run up profits. And I’m going to say he didn’t add this part
And run the risk of exploding. Do you want other parts of the Biden administration to be more aggressive on these issues? All of the Treasury Department and all of the other agencies and and regulatory departments that I mentioned. What do they need to be more aggressive as well? I think right now
This really is at the Fed. And then I want to say the regional Fed. So the whole Fed structure, the CFP, for example, they’re dealing with consumer contracts. And that’s not the heart of what’s gone wrong here. FDIC is trying to figure out how to manage the insurance for deposit rates.
And actually, I think this is a place, thanks to the intervention, that the Treasury was forced to take weakened before last. I think this is a place now we’re going to have to have statutory change because in effect, the Treasury combined with the Fed, has said we’re going to come in and start
Backstopping all deposits, backstop ing the banks, and that means they’re providing, in effect, a form of insurance and not charging for it. Hmm. Is there a way we saw some elements after the East Palestine, Ohio train derailment travesty where we saw some elements of the populist right, the JD Vance’s of the world
Joining with some elements of the populist left, the Sherrod Browns of the world. Is there an area here for the kind of actions you’re talking about that conservatives could join with you? I think there is and it’s the reminder that there are regulations that are helpful to all of us
And the regulations are about safety. That’s what obviously the train derailment was about. It’s also about economic safety. We need a Federal Reserve that is doing its job and that is to keep these banks safe. Look, no depositor, no small business, no family, individual should have to say,
I need to see the bank’s balance sheet before I know that it’s safe to put money in the bank. The whole idea is the regulators are supposed to keep those banks safe. You know, I used to talk about exploding toasters that you shouldn’t have to be an expert on toasters
To buy a toaster. Yeah, we ought to know that they’re safe. That’s what regulations are about. Same thing ought to be true about putting money in banks. It should be safe. Banking should not be a place for risk takers who want to. Who want to build up, you know, fast profits.
Silicon Valley Bank. Increase their profitability by 40% the last three years. That’s not what we want from banks. We want banks that are boring and that are safe.
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Elizabeth Warren is Correct, Jerome Powell is a Dangerous Man. He is trying to Weaken te Economy.
Hope Elizabeth Warren runs fo president she is far more Qualified than anyone in that orbit .
forgetting climate change, which is massive in how it is creating havoc with our lives on every level…
And she is a dangerous woman to have in political office..
Warren during covid was asking for massive government support and the FED delivered and now she's saying the FED caused inflation. Senator Warren, you can't have your cake and eat it too.
If you print to much money the only answer to is is a recession but it,s not Powel who made that choice.
it was Ben Bernake in 2007/8.
and again the same answer with the corona crisis.
but is it something special ? No.
all crisis are answered like this.
then who is to blame…
But didn't these guys throw helicopter money during the pandemic and had decade long of artifically low interest rates? Quantitative easing increased the money supply in the system causing the Fed's Balance sheet to expand tremendously. Asset prices boomed to all time highs across – stocks, real estate etc… At some point, things have to reverse to the mean and institutions like the Fed ensure they prevent the economy to overheat. Unfortunate consequence yes is unemployment but failure of the Fed to act/ not act would have made things worse than they are.
Warren, what about savers? They get screwed for decades now.
This is so dishonest. She knows how the system works, It is the same all over the world. Central banks raise rates to fight inflation. It is not just the American Fed. Stop spending money you don't have and the problem will go away.
Jay Powell is doing exactly what needed to be done to pop the bubbles that the Fed and Us Govt have created thru the manipulation of Interest rates, all done to ring 50 years of future real estate equity out and into the here and now to keep their Bankster/Govt. Ponzi schemes going and the economy in Goldilocks mode for the last 30 years or so(all the booms have been synthetically generated)
Today when you purchase a home for say 300 thousand, that would have cost around 50 grand in 1980 or maybe a new 50 or so thousand dollar vehicle)(a vehicle that on average would have cost around 5 thousand dollars in 1980 when Govt debt was under 1 Trillion) you are basically paying a Stealth Inflation tax, due to the Collusion of the Federal Reserve(Global criminal Bankster networks) and the US government (33 Trillion of debt accrued to operate their massive mismanagement of the Govt.) which has been borrowing Trillions of dollars annually from the Federal Reserve Corporation so they can loan the Taxpayers back their own money at a perpetual interest charge(1 Trillion per year for the Annual interest payments to service the Govt. Debt alone)…All this so they can operate a massively bloated govt that has 20 million employees Federal and Local along with 50 million Illegals, living off of communist programs Section 8 Housing Welfare Disability free Obama care Internet cell phones Etc., etc., all this expense is placed directly onto the backs of the working Taxpayer(what is left of us)…
All the while the Progressive "Communist" Democrats incite their Z Gen Zombies like Antifa and Blm to emerge once in a while from their mothers Gated community basement to organize riots to burn down and loot Mom and Pop small business and commit violence and Racist acts and abuse against Caucasians and Asians, the very people that make their life of Govt Affirmative action free Healthcare/ Housing etc., all possible because they pay a vast majority of the taxes particularly at the State and Local levels.. You could not make this Trainwreck of a story up, reality is so much stranger than fiction…
Treasury Bills are not a good export product. We need to start producing again.
Fed up with the FED. I saw the hearing when Chair Powell admitted to the 12 times that raising the interest rate has never worked. The economic system is outdated. The dollar is going to change. Let us prepare. We the people have to unite and issue the currency.
So why doesn’t she do something about corporations gouging people ???
I think, they are fucking us.
We are so lucky to have chairman Powel guiding the fed. Cheap money has been destroying market value.
https://youtu.be/Iuo7C8hiwJc
I voted for Sen. Warren before I understood money & Bitcoin. Now, I’m her biggest detractor. She & her ilk want to control people’s lives by declaring war on Bitcoin all the while they continue to debase the US dollar. She must be defeated in 2024!
Warren is a poor guest, as her accuracy, and dismissal for what market players really do. She's "conflict" person (as are most politicians) instead of a "building"
This smart woman has it exactly right:It's complicated
This is what happens when (R)s run the show
Let inflation rage, I'd love to see the reaction of these idiots.
Being so articulate in explaining economy, why don't you run for the presidency regardless of whether Biden decides to run for the second term? Run Liz.
Agree Powell is doing a crap job he never increased the interest rates fast enough but if Warren was in charge we would be bankrupt and in a depression
What about our government spending to much money? What else can Powel do if congress isn't addressing the issues she described. Do something instead of throwing each party under the bus. Hopeless.
Are there any Republican policies that do not damage the economy or society or environment or international relations?
Interest rates hikes can make people save more money in the bank therefore lower demand even if there are a lot of money for elastic markets, so for example your bank or your Bonds (also us monetary assets) pay more of a garantee intrest rate while the stockmarket will fall due to less profits from biger lone repayments. and cuz debt payments are highter exept from the fact that the money supply shrinks debtholders will spend less money therefore bussness will not be able to incrise prices on markets with elastic demandsm it's not ONLY the unemployment. But yes the most efective way to keep inflation low were INELASTIC suply issues are the problem is having food and energy vouchers as the demand is inelastic (that means someone is willing to spend 1 million dollars or more for one single meal if that is the price of staying alive when someone is starving, in ww2 in greece peaple sold there houses for a little bit of food not to starve for a few weeks or less, this was common !)
Warren, The most dangerous threat to US citizens is YOU, YOURSELF.
Will Gary Gensler be the escape goat for the Big Banks manipulation of the Crypto Friendly banks that failed, causing the bank runs around the world?
Crisis. Institute regulations. Wait until the masses forget. Remove regulations. Rinse, repeat.
The problem with inflation is not just on the demand side. People don't have extra money and are bidding prices up. It is on the supply side because of the pandemic. Some people don't want to go back to factory work because they are used to not working. If you go to home depot for example, you cannot find at least 15% of the things you want on the shelves. They tell you it is a supply chain issue.
How about increasing unemployment by firing Powell? Let's see how he likes it.
Printing money right and left have consequences
And finger this problem to the one man is childlessness,
Can this lady tell us why in Europe inflation is so high too?
The only reason Warren criticizes Powell is because he is a Republican and she is a Democrat; still doing partisanship. Shameful.
Hey Dems, lets forgive student debt! When you really dig in you realize this is more about equaling thing because it is really about 1 race.
As a non white I believe this is directed to help 1 race:
40.2% of White undergraduate students use student loans to pay for school. 55% of student loans go to White students. 50.8% of Black students use student loans.Jan 16, 2023
Because as proven by credit scores, who pays their bills?
African American and American Latino populations have substantially lower scores than the white American population on average.
Here are the statistics:
Black students take out the most student loan debt for a bachelor’s degree, followed by white students.
Black borrowers carry a median student loan balance of $30,000.
Ninety percent of Black students take out student loans to pay for college, compared to 66 percent of white students.
Four years after graduating, Black students hold almost twice as much student debt as their white peers, largely due to differences in interest accrual and graduate school borrowing.
After graduating from college, 17 percent of Black students are behind on their student loans, compared to 9 percent of white students.
Out of women undergraduate borrowers, the average Black woman carries the most student debt, averaging $41,466.05 one year after graduation.
Almost 71 percent of Black undergraduates are Pell Grant recipients, meaning they come from low-income households.
I love how all politicians and media lie to us, constantly….by not telling the truth. The way banks operate is; they take our money, invest and lend it to other people, get interest on those loans and we get nothing. This is OUR money they loan. Amazing how we don't know how our country works and then believe the lies we are told and when we find out….we do nothing. We have only ourselves to blame for how screwed over we are, constantly. The serfs support all these thieves. No democracy here folks. Oligarchy all the way. Banks are the biggest ponzi scheme.
Warren has no eco no ice orbusiness credentials , as a teacher,!! She should perhaps meet with economists and business experts rats before she shoots. Off her mouth
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Based on the CPI/PPI report coming up the 12/13th of April FED might pause rates in May(gas prices are an indicator of inflation). Powell will not intentionally send the country into a recession.
And cnn shouldn't exist
Why is she the only one that looks at the real problems? She is completely right! Companies are also keeping stock low to keep prices up
The problem senator Warren has in explaining what went wrong is that she stops short of recommending the one very potent solution which can stop inflation in first place, provided that the economy doesn’t react to the external shock!!! Why she didn’t say it is beggars belief!!! She clearly understands what is going on, but keeps silent!!!! FED’s ability to guide credit creation is very EFFECTIVE TOOL which can tell banks to which purpose they should create money (ie. inflation,speculation or productive economy). FED is failing US society in this, because people do not know that inflation is NOT INEVITABLE. She explained the other sources of inflation well and pointed out that interest rates cannot affect it. Omission of the fact that banks create money when granting loans and allocation of this brand new private money matters, made this interview somewhat unbalanced, because dealing with inflation when created is difficult, for all central banks use interest rates only to indirectly affect the demand for money and it doesn’t affect creating money by banking system for unproductive purpose but definitely affect business and ordinary people. And yes, I am aware that the inflation created by covid and war in Ukraine is different type from the inflation created by banking system. We’ve seen last time around when the new money went to the stock market while the real economy was starved, that inflation in real economy was low, whereas stock market boomed. This, she too should explain, is what the American nation should know. People and government should demand that FED uses this simple rule on bank credit creation or in the other words on nations money supply. Inflation started before covid and was accelerated by covid and the Ukraine war.
Chairman Powell (who lacks magic wand but little 'tools') is having difficulty 'managing' problems caused by somebody else, "experts" are NOT unanimous in solutions, the criticism is easy but can be healthy and fruitful if done with the constructive or noble intention.
Warren drove off the cliff here – if Powell is dangerous, than what was that wretched Greenspan?? Satan's spawn?
You got what you voted for. Now if you don't want wars, no threats, lowest unemployment in history, good economy, etc… Then Trump is your answer. His resume speaks for itself.
We need a 1970 minimum wages and large land yachts on the road that solve problems
The federal housing administration is the bread and butter of democrats and Russia and all communist countries around the World people can't afford housing anywhere
This banking mess maybe JP plan B in case his “strategy “ didn’t work or part of his and his friends strategy. There is much darkness in all this. What are his real intentions ? Don’t be confused in the caos. There is a say: if you can’t convince them confuse then. I believe all this in very much intentionally. He should immediately be remove .
Sooner take her word than any republican.
Because he has failed in his strategy to lower inflation , that he partially created, he went for the banks. What he specifically has said is that business has to be reduced. Meaning that business have to be out of business and that will help with unemployment. I heard him said that. He has said that. He should not be in that job . He should be dismissed that is what will help lower inflation and unemployment.