A review from government watchdog Accountable.US finds more and more prominent economic experts and lawmakers have come out against further interest rate hikes from the Federal Reserve – warning that further rate increases would do serious harm to the economy and lead to millions of layoffs while doing little to address inflation drivers like corporate profiteering. The analysis comes as the Federal Open Markets Committee (FOMC), the Federal Reserve body which determines interest rates, meets today to discuss their widely expected 25 basis points interest rate increase later this week.
The Fed has every reason to halt further job-killing interest rate hikes as key indicators show inflation is slowing while the economic recovery remains fragile. Too many hard-working families have everything to lose if the Fed stays the course with higher rates that only push the economy closer to a recession. Repeated interest rate hikes have done little to curb corporate greed that even Fed economists admit is what’s really driving high costs on everything from groceries to gas. The Fed faces a choice: back down and let policy and lawmakers continue to take impactful steps to rein in corporate profiteering – or keep needlessly threatening jobs and an economic downturn with further rate hikes.”
Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power program
The message to the Fed from a growing chorus of worker advocates and economic experts has been clear: Don’t do more harm than good. Even Fed officials have acknowledged higher interest rates will slow down economic growth and a study from Fed economists found corporate overcharging is what is really driving inflation. Recently, as employment rolls have expanded across the country, Fed officials have reportedly gone so far as to express “concern” that “labor markets are too tight.” The Fed’s priorities are truly out-of-touch to suggest too many Americans have jobs. The more Americans find work, the more the Fed embraces job-killing interest rate hikes that disproportionately hurt low-income workers and struggling mom and pop shops. With each new interest rate bump, the Fed is prioritizing demands from big banks, hedge funds and other Wall Street special interests at the great expense of average working families.