House Democrats Aren’t Happy With Fed’s Hawkishness

The Federal Reserve chairman Jerome Powell, this week, received separate letters from two Democratic lawmakers; Senator Sherrod Brown of Ohio and Senator John Hickenlooper of Colorado who called on the US central bank to slow its aggressive pace of interest rate hikes.

Biden’s administration and several congressional Democrats have generally supported the Fed’s rate-hiking campaign to fight high inflation, but now this has changed as the political affiliations reveal their demand. More Democrats are warning about potential damage to the labour market and other parts of the economy from the Fed’s moves.

Following the Fed’s last policy meeting, when officials raised interest rates by a historically large 75-basis points, Warren tweeted: “Destroying jobs and crushing wages of millions of workers is reckless and dangerous.”

High inflation necessitates a response. But the concern is the Fed is doing too much, too quickly, according to the mentioned letters. The senators see that Fed should wait to see the effects on the economy and how those changes are absorbed.