Why a top Democrat is concerned with the Fed's rate hikes
The top Democrat on the
In a Tuesday letter to Powell, Sen.
"For working Americans who already feel the crush of inflation, job losses will make it much worse. We can't risk the livelihoods of millions of Americans who can't afford it," wrote Brown, chairman of the Banking panel, in a Tuesday letter released by his office.
"I ask that you don't forget your responsibility to promote maximum employment and that the decisions you make at the next … meeting reflect your commitment to the dual mandate," he added.
Brown's letter comes a week before the
Fed officials expect the jobless rate to rise to 4.4 percent by the end of 2023, according to recent projections, which would mean more than 1 million Americans losing their jobs.
But top progressive lawmakers, including Sens.
Brown did not explicitly call on the Fed to halt or slow down its rate hikes but expressed concerns that the bank may be moving too quickly to raise interest rates given how long it can take the full impact of increases to hit the economy.
He also warned Powell against using interest rates to tackle other sources of high inflation — including the war in
"Monetary policy tools take time to reduce inflation by constraining demand until supply catches up – time that working-class families don't have," Brown wrote.
"We must avoid having our short-term advances and strong labor market overwhelmed by the consequences of aggressive monetary actions to decrease inflation, especially when the Fed's actions do not address its main drivers," he added.
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