Elizabeth Warren Slams Trump Over 'Self-Inflicted Economic Maelstrom' Caused By Tariffs

3 days ago

During Thursday's Senate Banking Committee hearing, Sen. Elizabeth Warren (D-MA) slammed the Trump Administration for how they have managed the economy.

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Transcript

00:00Thank you, Senator.

00:01Thank you, Mr. Chairman.

00:04So anyone who's been awake for the last week has seen the self-inflicted economic maelstrom

00:10that both the United States and the world have lived through.

00:14The Trump administration is living in a fantasy land and evidently not living there alone.

00:20According to Team Trump, the economy is booming, tariff money is rolling in,

00:25massive tax cuts for billionaires will be free,

00:29and the research scientists Doge has fired from the National Institute of Health

00:34and the customer service specialists that they fired from the Social Security Administration

00:39are happily screwing in tiny little iPhone screws as they work in iPhone factories

00:46that have magically sprung up across the country.

00:49Look, the Trump administration is in desperate need of financial regulators who live in the real world.

00:57Governor Bowman, if confirmed, you would be the number one financial cop on the beat

01:03during an incredibly dangerous time.

01:06As we've learned from previous crisis,

01:09the tremors in the financial system can lead to avalanches in the rest of the economy and vice versa.

01:16You would be the person on the front line of defense to prevent that from happening.

01:22So, Chair Powell said that President Trump's tariffs will lead to, and I quote,

01:29both higher unemployment and higher inflation.

01:34We've seen wild swings in the financial markets over the past week, at least some of us have seen them.

01:39Governor Bowman, I want to understand how you see the risks of the current moment.

01:44In what ways could President Trump's tariffs and their economic effects threaten the stability of our financial system?

01:55Well, Senator, that's a great question.

01:58And I'd like to start by stating that the economy is strong.

02:01Okay, fine.

02:02But answer my question, if you would, please.

02:05We're going to be limited on time.

02:06We've got a tough chairman here.

02:07Economic growth has been solid, and though it may be slowing.

02:11And the unemployment rate is still historically low.

02:14Inflation came down today, as we saw with the recent CPI report.

02:18Okay.

02:18And I think that the stability of the economy is strong.

02:19Governor Bowman, could you answer my question, please?

02:23I asked in what ways President Trump's tariffs and their economic effects threaten the stability of our financial system.

02:30Chair Powell has already identified it.

02:33Higher inflation and higher unemployment.

02:35I'd like to hear from you what ways you think Trump's tariffs potentially threaten our financial system.

02:42Senator, as you know, the mandated goals or the goals that have been mandated by Congress for the Federal Reserve are maximum employment and price stability.

02:51And as the path for these policies continues to evolve-

02:53Could you use the word tariff?

02:54My question, I've asked it now twice, is in what ways do President Trump's tariffs threaten the financial system?

03:04Jay Powell has already answered this question.

03:07You're over at the Fed.

03:08Could you just give me a straight answer on that?

03:10I think as we were watching and waiting to see how the path for these policies continues to evolve, we'll understand what the economic effects of the policies are.

03:19So are you saying you don't know if the tariffs could have any effect on the financial system?

03:24Well, I think it's unclear at this point since we don't know how the economic policies will be-

03:30So, let me get this straight.

03:31And what their effects on the industries will be.

03:33President Trump's tariffs threaten to strangle the economy.

03:36This is according to the Fed Chair.

03:38The stock market is experiencing the kinds of swings we don't see outside financial crises.

03:45Even Treasury securities, they're supposed to be resilient when people fly to safety, have started to experience volatility.

03:57And you don't see any risks to the financial system?

04:01Nothing?

04:02You got nothing for me here?

04:04Senator, what I would tell you is that we're starting on a strong economic foundation.

04:08Okay, what I'm hearing is nothing.

04:09As we see that there has been volatility in the stock market that's existed for a number of years.

04:12So look, the worst scenario we have here is that this Trump-inflicted economic crisis undermines confidence in our financial system.

04:20Banks and other lenders may face huge losses as households and businesses struggle to meet their debt payments if we plunge into a recession.

04:31Hedge funds and other leveraged financial firms are already facing margin calls and may be forced to dump assets, including Treasuries, at fire sale prices.

04:43Financial instability would amplify the harms of these irrational tariffs.

04:50And you want to just sit here and say, oh, it's all good.

04:54So let me ask you, Governor Bowman, will you immediately conduct a stress test of the big banks to probe whether they can endure a deep and prolonged recession triggered by a massive trade shock?

05:09Just run the tests.

05:10Are you willing to do that?

05:12We have a process for stress testing that has already been underway this year, and it will continue to move forward as we planned.

05:22So are you saying you will not run a stress test immediately?

05:27Is that exactly right?

05:28You're just, all of the things that have happened in the last week and in the last two months, you're just going to cover your eyes and cover your ears and say, I'm sure the banks will be fine.