Seventh letter from Hickenlooper to the Fed warns that high interest rates are still raising costs for American families
WASHINGTON – U.S. Senators John Hickenlooper and Elizabeth Warren urged the Federal Reserve to cut the federal interest rate by a further 50 basis points ahead of its November Federal Open Market Committee meeting.
“Given the Fed’s confidence in inflation moving towards its target of 2 percent, now is the time to lift its restrictive policies and proceed with additional rate cuts,” Hickenlooper and Warren wrote. “If the Fed moves forward with more rate cuts, housing prices and mortgage rates would thus also likely drop, allowing more families to achieve the American dream.”
After months of Hickenlooper and Warren calling on the Fed to cut the federal funds rate, the Fed finally lowered it by 50 basis points in September, the first cut since 2020. The Fed explained: “[t]he Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.” Recent economic data shows that inflation has fallen to 2.1 percent, the lowest since February 2021.
However, even as the economy remains strong, housing costs are too high and the demand for workers may be waning due to high federal interest rates.
“As we tackle the housing affordability crisis across the United States, it is critical that we build more housing. Lowering interest rates is key to unlocking more supply: rate cuts will lower of the cost of capital, helping to tackle inflation by spurring more housing construction and consequently lowering housing prices,” the senators continued.
This most recent letter comes after Hickenlooper called on the Fed multiple times to consider the negative impacts of its continued interest rate hikes on American families:
- In September 2024, Hickenlooper and his colleagues sent a letter urging the Fed to cut the federal interest rate to help lower costs for working families, ahead of its September Federal Open Market Committee meeting which led to a 50 basis point cut
- In August 2024, Hickenlooper and his colleagues sent a letter to the Fed asking them to cut interest rates to stop undermining working class Americans.
- In June 2024, Hickenlooper and his colleagues sent a letter to the Fed, urging them to cut the federal interest rates that have increased housing and insurance costs for working families.
- In January 2024, Hickenlooper and his colleagues sent a letter to the Fed calling on them to cut interest rates and address the affordable housing crisis
- In January 2023, Hickenlooper sent a letter to the Fed cautioning against another interest rate increase in the face of rising layoffs and reduced employment
- In October 2022, Hickenlooper called on the Fed to pause rate hikes in a letter to Chair Powell
For full text of the letter, click HERE.
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