Warren hammers Powell over jobs report: ‘Cut rates now’

Sen. Elizabeth Warren (D-Mass.) slammed Federal Reserve Chair Jerome Powell for holding interest rates steady earlier this week after Friday’s jobs report came in weaker than expected. 

“Fed Chair Powell made a serious mistake not cutting interest rates,” Warren said in a post on social platform X. “He’s been warned over and over again that waiting too long risks driving the economy into a ditch.”

“The jobs data is flashing red,” she added. “Powell needs to cancel his summer vacation and cut rates now — not wait 6 weeks.” 

The central bank opted Wednesday to maintain rates at a range of 5.25 percent to 5.5 percent. In a press conference following the announcement, Powell noted that the Fed could begin cutting rates “as soon as” September if inflation and the labor market continue to cool. 

However, the July jobs report hinted at a quicker slowdown than previously anticipated. The U.S. added 114,000 jobs last month, and the unemployment rate ticked up to 4.3 percent, according to Labor Department figures. 

The Fed has held rates at a two-decade high since last July. It raised rates throughout 2022 and 2023 in an effort to tamp down skyrocketing inflation, which peaked at a 40-year high of 9.1 percent in June 2022. 

Inflation has since fallen to 3 percent. However, several hotter-than-expected inflation readings in the first quarter of 2024 made the Fed wary of cutting rates earlier this year. 

While the second quarter showed more signs of cooling, the Fed’s rate-setting panel noted Wednesday that it needed to gain “greater confidence” that inflation is moving sustainably down to its target of 2 percent before starting to cut rates. 

Warren has fierecly criticized Powell throughout his stint leading the central bank. The senator has said Powell “failed” at both supervising the financial sector and supporting the economy through the Fed’s management of interest rates.