Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.), John Hickenlooper (D-Colo.), and Sheldon Whitehouse (D-R.I.) wrote to the Chair of the Federal Reserve Board (Fed), Jerome Powell, urging a cut to interest rates at this week’s Federal Open Market Committee (FOMC) meeting, in light of economic data showing that inflation is decreasing and is very close to the Fed’s target. If the Fed fails to cut rates at this week’s meeting, the country will not see lower rates until at least September.

In recent weeks, Republican members of Congress have threatened the independence of the Fed, suggesting that the Fed cutting rates before the 2024 election would be “viewed as political.” However, economic data suggests that the federal funds rate should already be lower than it is now. In fact, economic experts across the political spectrum are now calling for the Federal Reserve to act. The members urged the Fed to resist partisan bullying and warned against ‘putting political considerations ahead of its dual mandate to “promote maximum employment and stable prices.”

The personal consumption expenditures (PEC) index, a key gauge for inflation, decreased for the third consecutive month in June, making a strong case for rate cuts. Additionally, while the labor market is healthy and inflation is declining, the unemployment rate increased from 3.6 percent to 4.1 percent over the last year and job openings are down 20 percent. The Wall Street Journal’s chief economics commentator argues that the unemployment rate increase may be indicative of a trend because when unemployment ticks upwards, “it tends to keep going up.”  While wage growth remains strong, it has slowed in recent months, and surveys of companies’ pay plans indicate that it is likely to continue slowing into next year. Without rate cuts, the Fed risks erasing the country’s post-pandemic economic gains.

The federal funds rate has stayed in the 5.25-5.5 percent range for a year, its highest level in more than 20 years. Households are feeling the pressure of high rates—particularly on their credit cards and auto loans. Forcing American families to wait until the Fed’s September meeting for rate cuts will only exacerbate the economic pressures on families.

And it’s not just families feeling the pressure. Atlanta Fed President and FOMC member Raphael Bostic said that consumers in his region are “at (their) limit” and cannot shoulder the burden of high interest rates for much longer. Another key Wall Street analyst made the case clearly: “Waiting too long risks a higher peak in unemployment for little additional reward on the inflation front.”

The lawmakers are calling for the Fed to resist partisan politics and follow the data. Economists and monetary policy guidelines are suggesting the rate should already have been cut and need to be cut at the July FOMC meeting. .

Senator Warren has been ringing the alarm bells about the serious dangers of Chair Powell’s continued interest rate hikes:
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https://www.warren.senate.gov/newsroom/press-releases/warren-hickenlooper-whitehouse-urge-fed-to-protect-american-economy-cut-interest-rates-from-20-year-highs

AKA print more money!

It would appear that Commie Curtis, who I am assuming is speaking for all the commie M&Ms, has stated that interest rates should not be dropped.  Why is that Commie Curtis? Powerfulnnnzzzzzz (http://www.aesopsretreat.com/forum/richedit/smileys/YahooIM/44.gif)

Three Democratic Senators, Elizabeth Warren D-MA, Sheldon Whitehouse D-RI, and John Hickenlooper D-CO sent a letter to Fed Chair Jerome Powell and his associated policymakers to advocate for a 75-basis point rate cut in order to safeguard the U.S. economy from spiraling into a potential recession Bloomberg reported.

“If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession,” the three Senators stated in their letter, which was sent just days before this Wednesday's rate decision.

Warren, Whitehouse, and Hickenlooper added that “now is the time to swiftly move forward with rate cuts,” as “employment numbers adjust slowly, so the Fed should front-load rate cuts to avoid sliding towards a potential crisis.”

The letter proposed by the Senators show concerns about the latest jobs data as they believe “it is clearly the time for the Fed to cut rates,” as they went on with saying: “In fact, it may be too late: Your delays have threatened the economy and left the Fed behind the curve.”

It should be noted that although FOMC officials have recognized a cooling labor market, they still characterize the current job environment as stable.

Bloomberg noted that in response to the letter, a Fed spokesperson stated: “We have received the letter and plan to respond.”

As for what is priced in at the moment, per the FedWatch Tool on Monday shows the target rate probability for a 50-basis point rate cut on sits at 61% while a 25-basis point cut stands at 39%. There is no consensus at the moment for a 75-basis point rate cut per the tool.
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https://seekingalpha.com/news/4150054-democratic-senators-send-letter-to-powell-advocating-for-a-75-bp-rate-cut

Democrats are desperate for more inflation!

Why do the M&Ms want to keep the prime rate high?  They have been screeching that it should be dropped for years now.  Thats what happens when the M&Ms ate the dogs. Powerfulnnnnzzzzz (http://www.aesopsretreat.com/forum/richedit/smileys/YahooIM/108.gif)

Democrats are desperate for more inflation!

Democrats, why do you want the dollar to become valueless?

It’s official: America’s real wages are up under Biden-Harris

https://www.aesopsretreat.com/forum/index.php?topic=336500.0

Nope!

Why are you against dropping interest rates Scabby, when you M&Ms were all wanting to do that just a few months ago?  Powerfulnnnzzzzzz (http://www.aesopsretreat.com/forum/richedit/smileys/YahooIM/44.gif)

Artificially lowering interest rates devalues the dollar!

That results in more inflation!

that'ss why it's a balancing act whith the feds using interest rates to moderate inflation.    in a healthy economy there is always some inflation and always has been. 

When has the Fed ever successfully moderated inflation?

Never!

right now

How so?

I see no such success!

Even now, inflation remains untamed!

Federal Reserve cuts interest rates by half-point; first rate reduction in four years!

The Fed most recently cut rates in March 2020!

https://www.foxbusiness.com/economy/federal-reserve-interest-rate-decision-september-2024

Inflation to return with a vengeance!

This is a desperate attempt to temporarily boost the economy despite knowing inflation will return!

Why are the same M&M commies that were, less than 2 months ago, screaming for rate cuts, now telling us that they are against rate cuts?  Was it something Nyop Joy said?  MAGA (http://www.aesopsretreat.com/forum/richedit/smileys/YahooIM/63.gif)

Democrats are the party of lies and bad ones at that!

The Fed will do anything to get Democrats elected even if it is fiscally suicidal!