WASHINGTON, DC – Today, the Federal Reserve announced an interest rate pause after an unprecedented 10 increases in a row since March 2022. Government watchdog Accountable.US called the stoppage long overdue as the Fed ignored red flags for months that the policy has been putting enormous stress on the economy and threatening millions of American jobs – clear signs that the Fed should hold off on any further interest rate hikes for the foreseeable future.
No matter the reason the Fed is pausing interest rates now, the decision should have been made months ago as it became clear the policy was squeezing the economy while doing little to squash the corporate profiteering epidemic fueling high prices. The damage already done to the economy under excessive interest rates should disabuse Fed officials of resuming the failed policy any time soon in order to protect millions of jobs. They’ve already done their friends on Wall Street enough favors. It’s time to consider average workers for a change.”
Liz Zelnick, Accountable.US’ Director of Economic Security and Corporate Power.
Economic Cracks That Formed Under Fed’s Relentless Interest Rate Hikes:
- USA Today: “Nearly 7 in 10 Americans said they’ve already been squeezed by the rate hikes, according to an online survey of 230 respondents conducted by WalletHub from April 17 to April 21.”
- CNN: “Areas of the US economy have started to crack under the weight of persistently high inflation and a string of 10 consecutive rate hikes from the Federal Reserve. […] Some of the traditional recession indicators have been flashing red. Layoff announcements have quadrupled so far this year to 417,500, which — excluding 2020 — is the highest January to May total since 2009, according to a report from Challenger, Gray & Christmas released Thursday. Falling consumer confidence, monthly declines in the Conference Board’s Leading Economic Index, and drops in temporary help employment are also signaling that a downturn is just ahead. However, that long-predicted recession isn’t here just yet.”
- Wall Street Journal: “Higher interest rates and inflationary pressures have made vehicles a lot more expensive. And financial turmoil could mean fewer auto loans. That in turn could lead to less hiring of auto workers.”
- Financial Times: “Across the country, well over a dozen states are flashing warning signals, triggering the so-called Sahm rule, which links the start of a recession to when the three-month moving average of the unemployment rate rises at least half a percentage point above its low over the past 12 months.”
- New York Times: “[M]anufacturing is suffering something of a hangover as retailers burn through bloated inventories. Inflation-fighting efforts by the Federal Reserve […] have squelched big-ticket purchases. New orders have been declining since last summer, and a widely followed index of purchasing activity has been downbeat for six months.”