WASHINGTON — Ahead of the Federal Reserve’s Board of Governors Federal Open Markets Committee meeting, 23 members of the House and Senate, led by the Congressional Progressive Caucus, call on Chairman Jerome Powell to quickly present a plan to start lowering interest rates that continue to squeeze working people.
In a new letter the lawmakers write, “With core inflation already having come into line with the Federal Reserve’s target, today’s excessively contractionary monetary policy needlessly worsens housing market imbalances and the unaffordability of home ownership, creates risks for banking stability, and could threaten the achievements of strong employment and wage growth and its attendant reductions in economic and racial inequalities.”
“The American economy recovered from COVID because congressional Democrats and President Biden partnered to invest in workers over corporations and created paths to economic security for people who had been locked out before,” said Representative Pramila Jayapal (WA-07), Chair of the Congressional Progressive Caucus. “Unnecessarily high rates put all that at risk. They will only punish everyday Americans: exacerbating the housing crisis, hindering the deployment of clean energy, and throwing the future of the Biden recovery into uncertainty, while threatening the wages and jobs that our communities depend on. It’s past time for the Fed to end this squeeze on working- and middle-class families.”
The Federal Reserve has increased interest rates 11 times since March 2022 despite clear evidence that inflation has cooled to within the Fed’s target range, contradicting its argument for suppressing employment and worker pay and keeping mortgages high and loans unaffordable.
The members write, “The data over the last year also provide evidence that we may be on a faster productivity growth path, which will further alleviate inflationary pressures. None of these indicators correspond with an overly strong labor market that could threaten to spike inflation. The more realistic concern in light of these labor-market trends is that the Federal Reserve may wait too long to lower rates and allow tight monetary policy to reduce employment and real wage growth.”
The impact of the Fed’s decision is particularly acute amidst a nationwide housing crisis. As the lawmakers emphasize,“the housing market is facing major imbalances and making homeownership unaffordable due to persistently high interest rates. New housing starts have fallen almost 20 percent from their April 2022 level. Existing home sales have fallen to a 30-year low.”
Representative Jayapal added, “The Congressional Progressive Caucus has invited Chairman Powell to meet with our members to discuss the agency’s monetary policy and we hope the Chairman will join us in the near future.
The full letter can be found here.
Signatories include: Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA); Representatives Pramila Jayapal (WA-07), Becca Balint (VT-AL), Nannette Barragán (CA-44), Jamaal Bowman, Ed.D. (NY-16), Greg Casar (TX-35), Steve Cohen (TN-09), Veronica Escobar (TX-16), Jésus “Chuy” García (IL-04), Jonathan Jackson (IL-01), Steven Horsford (NV-04), Val Hoyle (OR-04), Jared Huffman (CA-02), Barbara Lee (CA-12), James P. McGovern (MA-02), Jerrold Nadler (NY-12), Alexandria Ocasio-Cortez (NY-14), Ayanna Pressley (MA-07), Delia Ramírez (IL-03), Rashida Tlaib (MI-12), Juan Vargas (CA-52), and Frederica Wilson (FL-24).
Related Files
- Progressive Letter to the Federal Reserve Calling for a Plan to Lower Interest Rates - 3-18-24 FINAL CPC Bicameral Letter on Federal Reserve Policy (1).pdf (893.6 KBs)
