Sen. Elizabeth Warren (D-Mass.) slammed Federal Reserve Chairman Jerome Powell for keeping interest rates steady earlier this week after Friday’s weaker-than-expected jobs report.
“Fed Chairman Powell made a serious error by not lowering interest rates,” Warren said in a post on X. “He has been warned many times that if he waits too long, the economy risks hitting rock bottom.”
“The jobs report is a red flag,” she added. “Powell needs to cancel his summer vacation and cut rates now, not wait six weeks.”
The central bank decided on Wednesday to keep interest rates in a range of 5.25% to 5.5%. At a press conference after the announcement, Chairman Powell said the Fed could start cutting rates “as early as” September if inflation and the labor market continue to cool.
But July’s jobs report suggested a faster slowdown than previously expected: The Labor Department said the U.S. added 114,000 jobs last month, and the unemployment rate rose to 4.3%.
The Fed has kept interest rates on hold at a 20-year high since July last year. The central bank has been raising rates through 2022 and 2023 to tame surging inflation, which hit a 40-year high of 9.1% in June.
Inflation has since fallen to 3%, but several higher-than-expected inflation readings in the first quarter of 2024 made the Fed cautious about cutting rates earlier this year.
Despite signs of further cooling in the second quarter, the Fed’s interest rate committee said on Wednesday it needs “more confidence” that inflation is falling sustainably toward its 2 percent target before starting to cut rates.
Senator Warren has been a fierce critic of Mr Powell throughout his time as central bank governor, saying he “failed” both to oversee the financial sector and to support the economy through the Fed’s control of interest rates.
