Senators Elizabeth Warren, Jacky Rosen, and John Hickenlooper are urging the Federal Reserve to cut interest rates, warning that prolonged high rates threaten economic growth and jobs.
Three Democratic senators have publicly urged the Federal Reserve to reduce interest rates. Senators Elizabeth Warren of Massachusetts, Jacky Rosen of Nevada, and John Hickenlooper of Colorado expressed their concerns in a letter to Federal Reserve Chairman Jerome Powell.
The senators' letter, stated, "We write today to urge the Federal Reserve (the Fed) to cut the federal funds rate from its current, two-decade-high of 5.5 percent." They argued that the prolonged period of high interest rates is slowing economic growth and is ineffective in addressing the main factors contributing to inflation.
Senator Elizabeth Warren sends a letter asking the Fed to cut rates.
— TFTC (@TFTC21) June 11, 2024
"This sustained period of high interest rates is already slowing the economy and is failing to address the remaining key drivers of inflation." pic.twitter.com/ZWSPsJdkWO
Their stance is supported by the view that high interest rates have led to increased costs in housing, construction, and auto insurance, potentially pushing the economy towards a recession and threatening American jobs.
The senators also proposed that the Fed should consider abandoning its 2% inflation target, taking cues from the European Central Bank and the Bank of Canada, which recently lowered their rates. They warned that the discrepancy in monetary policy could result in a stronger U.S. dollar and tighter credit conditions, potentially causing an economic downturn.
HuffPost's article highlighted that the Federal Open Market Committee is scheduled to convene to discuss monetary policy, with most economists not forecasting an immediate rate change. However, the senators advised that delaying rate cuts could be a mistake, pointing to the recent policy shifts by other central banks around the world.
