Senate Democrats Push for 'Major' Rate Cut As Fed Prepares to Hike Again
Key Takeaways:
- Democratic senators are urging the Federal Reserve to cut interest rates "immediately and significantly." - The senators argue that the Fed's rapid rate hikes are causing "unnecessary economic pain." - The Fed is widely expected to raise rates again at its next meeting in March.
Democrats Demand Fed Action as Economy Slows
A group of Democratic senators is calling on the Federal Reserve to "immediately and significantly" cut interest rates in order to help the economy, which is slowing down at an increasing pace. In a letter sent to Fed Chair Jerome Powell, the senators made the case that the Fed's aggressive rate hikes of last year - it increased rates seven times in 2022 - are having a negative impact on the economy. "While inflation remains too high, the pace of rate hikes has slowed economic growth and put unnecessary economic pain on American families and businesses," the senators wrote. The signatories to the letter include Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), and Cory Booker (D-N.J.). The senators' letter comes as the Fed is widely expected to raise rates again at its next meeting in March. However, the senators are urging the Fed to reconsider its plans and instead cut rates. "The Fed is increasing the risk of an unnecessary recession with each rate hike," the senators wrote. "The time is now for the Fed to change course and immediately and significantly cut rates." The Fed has not yet commented on the senators' letter.
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