Wells Fargo CEO Charles Scharf warned that America's economy is not prepared to deal with the Federal Reserve's interest rate hikes.
Scharf gave this warning during an interview on CNBC. It follows the Fed's announcement that it will try to rein in out-of-control inflation with more rate hikes. Fed Chair Jerome Powell claimed this is the only way to make sure inflation does not take hold of and cripple the United States economy.
"The risk is that because of the multiplicity of shocks you start to transition to a higher inflation regime. Our job is literally to prevent that from happening, and we will prevent that from happening," claimed the central bank chief. "We will not allow a transition from a low-inflation environment into a high-inflation environment."
These comments were made following the Fed's latest rate hike of 75 basis points (0.75 percent) in June, the highest interest rate increase since 1994.
"I wouldn't bet on a number, but I would bet on more significant rate hikes," said Scharf during his interview on CNBC, believing that the next rate increase will be between 50 to 75 basis points (0.5 to 0.75 percent), which he said would be "significant themselves." (Related: Fed chair admits US dollar's international standing could collapse.)
"Is it going to be more than that?" said Scharf. "Maybe, but it would require some change in the data to see something like that."
Scharf warned that while businesses and consumers have stayed strong through the whole inflation crisis and the latest rate hikes, the impact of rising rates even further has not been factored into the broader economy and could push it over the edge.
"We know rates are going up, it couldn't be clearer," he said. "We know that consumers and businesses, while strong today, are going to see deterioration, and we're going to act surprised when it happens."
Fed still insists rate hikes necessary to control inflation
Fed policymakers have promised to pass even more interest rate hikes and have pushed back against growing fears among investors and economists, claiming that the rate hikes will bring down the high inflation and that they will not be responsible for triggering slowdowns in economic activity.
"Many are worried that the Fed might be acting too aggressively and maybe tip the economy into recession," noted San Francisco Fed President Mary Daly in an interview. "I am myself worried that, left unbridled, inflation would be a major constraint and a threat to the U.S. economy and continued expansion."
Daly added that the Fed is cooling demand for goods, and thereby the inflation rate, by "tapping the brakes" and raising interest rates.
During an appearance in Congress, Powell admitted that the Fed is unlikely to stop its rate hikes in the coming months until it finds "compelling evidence" that the soaring inflation rate is being controlled and returning to a more manageable two percent year-over-year.
"We anticipate that ongoing rate increases will be appropriate, the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy," said Powell.
Learn more about inflation and how it is affecting the American economy at Inflation.news.
Watch this clip from "The American Journal" on InfoWars showing Fed Chair Powell blaming America's economic downturn on anti-vaxxers.
This video can be found in the InfoWars channel on Brighteon.com.
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