Find out “What Did John Hickenlooper Tell Federal Reserve?” Democratic Sen. John Hickenlooper warned the Federal Reserve to slow down its interest rate hikes amid stubbornly high inflation figures to stave off a looming recession.
‘Another rate increase by the @FederalReserve could lead to a recession. Let’s pause and see what’s happening before hammering the economy again,’ the Colorado senator wrote on Twitter, attaching a letter he had written to chair Jerome Powell.
What Did John Hickenlooper Tell Federal Reserve? Details
The Consumer Price Index for September put inflation at 8.2 percent.
Hickenlooper reasoned that continuing to raise rates when prices ‘may’ come down would be ‘foolish and damaging.’
‘High inflation necessitates a response,’ Hickenlooper wrote in his letter. ‘But the concern is the Fed is doing too much, too quickly.’
‘Mortgage rates have skyrocketed, borrowing costs for Main Street businesses have risen, credit card payments have gone up as interest payments have climbed, car loans are becoming more expensive,’ he added in the letter.
‘While inflation remains high– thus eroding consumers’ purchasing power — the Fed’s actions have further increased the cost of living … The prices of the above-listed goods and services have risen, and yet, the Fed’s actions have not brought other prices down.’
Democratic Sen. John Hickenlooper warned the Federal Reserve to slow down its interest rate hikes amid stubbornly high inflation figures to stave off a looming recession
Chair Jerome Powell has long warned there would be ‘some pain’ for American businesses and families as the Fed raised rates to tamp down inflation
Hickenlooper’s warning comes after Ohio Democratic Sen. Sherrod Brown, chair of the Senate Banking Committee, wrote a letter warning Powell and the Fed’s Board of Governors not to lose sight of their duty to protect jobs as they seek to rein in prices by hiking rates.
The unemployment rate in September fell to 3.5 percent, tied for the lowest since late 1969.
Fed policy makers are widely expected to make a fourth straight jumbo rate hike when they meet next week, bringing rates to 3.75-4 percent.
The CEOS of Goldman Sachs and JP Morgan Chase predicted at a conference in Saudi Arabia on Tuesday that the Fed would continue raising interest rates until they reached 4.5-4.75 percent, before pausing to reassess.
Goldman Sachs CEO David Soloman predicted in Riyadh: ‘The US is most likely going to have a recession.’
‘If they don’t see real changes — labor is still very, very tight, they are obviously just playing with the demand side by tightening — but if they don’t see real changes in behavior, my guess is they will go further,’ he said.
‘And I think generally when you find yourself in an economic scenario like this where inflation is embedded, it is very hard to get out of it without a real economic slowdown.’
Powell has long promised ‘some pain’ for American families and businesses due to the Fed’s moves to tamp down prices.
Calls from Hickenlooper and Brown echo earlier concerns from progressives like Sen. Elizabeth Warren, who was vocally warning back in August that she was worried the Fed would tip the economy into recession.
‘The causes of inflation, things like the fact that COVID is still shutting down parts of the economy around the world, that we still have supply chain kinks, that we still have a war going on in Ukraine that drives up the cost of energy, and that we still have these giant corporations that are engaging in price gouging, there is nothing in raising the interest rates, nothing in Jerome Powell’s tool bag that deals directly with those,’ Warren told CNN’s Dana Bash.
‘Do you know what’s worse than high prices and a strong economy? It’s high prices and millions of people out of work.’
Rate hikes target the demand side of the economy by making borrowing more expensive, but do not address the supply-side issues that are forcing prices upward. Democrats worry that while those matters – from Russia’s war with Ukraine to labor shortages and Covid-19 shutdown fallout across the globe – persist, rate hikes alone will have a negligible effect on prices and a large impact on hiring.
In a signal the Biden administration took as a win, the U.S. economy grew 2.6 percent from July through September after two straight quarterly declines, the Commerce Department said Thursday.
Biden, who had furiously denied that the economy was in recession after two straight quarters of contraction, was quick to take credit for the reversal and tout it as proof of a robust recovery.
‘For months, doomsayers have been arguing that the US economy is in a recession and Congressional Republicans have been rooting for a downturn,’ said Biden in a statement.
‘But today we got further evidence that our economic recovery is continuing to power forward,’ he added.
