00:00 Speaker A
The Federal Reserve is set to make a policy decision tomorrow, widely expected to lower its benchmark interest rate by 25 basis points. The Central Bank is grappling with sticky inflation. It’s running about a full percentage above the Fed’s 2% target. At the same time, the job market has weakened over the last three months. You said the Fed needs to make tough decisions and this is one of those moments. What would you like to see the Fed do right now? Are you in favor of a rate cut?
00:30 Elizabeth Warren
So, look, I’ve argued for two years now that I want the Fed to cut rates. I thought that inflation was well under control, headed in the right direction, and the Fed could bring down uh, the the interest rates. The problem now is that Donald Trump’s chaos has so weakened the economy that we’re watching the first signs of stagflation, and that is that inflation is tilting up and unemployment is tilting up simultaneously.
01:13 Elizabeth Warren
The Fed, of course, only has one tool, and it uses it differently. If inflation is going up, it raises interest rates. If unemployment’s going up, it lowers interest rates. And this is this is the box that Donald Trump has created. You know, I think there’s something important to underline here, and that is the Chairman of the Federal Reserve said last month
01:39 Elizabeth Warren
that the Fed would have lowered interest rates last February, if only Donald Trump had not created so much economic chaos. So the way I see this is one person right now is responsible for the high costs of at the higher uh interest rates and for the increasing problems that we’re seeing in the employment market. And that one person is Donald Trump.
02:08 Speaker A
What should we anticipate? Do you think a rate cut is the right thing to do here given what’s going on on the inflation front, given your concerns?
02:14 Elizabeth Warren
I think that the Donald Trump and the chaos in this economy are backing the Fed into a box. I am really worried now about those unemployment numbers. I still want to see the Fed cut interest rates, but it would have been so much better to cut them when we had a strong economy and strong employment.
