Washington D.C. – As the Labor Department released its latest jobs report today finding payrolls increased by 223,000 last month and unemployment fell to 3.5 percent, the Fed has renewed its threats to throw cold water on the economic recovery by again hiking interest rates – ignoring a chorus of economic experts that have warned doing so could cost millions of jobs. In a recent meeting, Federal Reserve officials reportedly “offered uncharacteristically blunt words of warning to investors that cautioned against underestimating the central bank’s determination to hold interest rates at higher levels to bring down inflation.” Fed officials reportedly expressed “concern” that “labor markets are too tight.”
You know the Fed’s priorities are warped when they suggest too many Americans have jobs. It seems 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. And for what? The Fed’s single-minded strategy has done little to blunt the real driver of inflation – corporate greed. Across industries, corporations continue to mark up prices on working families despite posting record profits and rewarding wealthy investors with billions in giveaways. Raising interest rates only hurts American families in the long run by pushing the economy toward a cliff. Recession is not inevitable, but that depends largely on deliberate decisions made by the Federal Reserve and Chairman Jerome Powell.”
Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power program
As the New York Times noted: “Unlike many large-scale employers that have locked in cheap long-term funding by selling corporate bonds, small businesses tend to fund their operations and payrolls with a mix of cash on hand, business credit cards and loans from commercial banks. Higher interest rates have made the latter two funding sources far more expensive — spelling trouble for companies that may need a fresh line of credit in the coming months.”
EXPERTS: DON’T DO MORE HARM THAN GOOD: The Fed’s ill-advised policy only draws attention from the real culprit behind out-of-control costs: corporate greed. Highly profitable corporations have kept raising prices on working families without justification while rewarding wealthy investors with billions in new handouts. Instead, the Fed wants to keep playing chicken with the economy with sky-high interest rates that more experts warn will lead to millions of layoffs. Throughout the pandemic, the Fed has catered to demands from big banks, hedge funds and other Wall Street special interests at the expense of average working families. If excessive interest rate hikes bring about an otherwise avoidable recession, will the Fed take responsibility – or try to pass the buck as they keep making matters worse?