06.10.24

Whitehouse, Boyle Call on Federal Reserve to Begin Cutting Interest Rates

Budget Committee Democratic Leaders Highlight Dangers of Elevated Interest Rates for American Families, Urge the Fed to Reverse Course

Washington, D.C. – Today, Senate Budget Committee Chairman Sheldon Whitehouse and House Budget Committee Ranking Member Brendan F. Boyle sent a letter to Federal Reserve Board Chair Jerome Powell ahead of this week’s Federal Open Market Committee (FOMC) meeting, expressing concern over the harmful economic effects of prolonged elevated interest rates and calling on the Fed to begin lowering rates.

“Excessively tight monetary policy may jeopardize the strong job market that the U.S. has enjoyed over the last several years,” wrote Chairman Whitehouse and Ranking Member Boyle. “The U.S. economy has achieved an apparent soft landing with inflation falling sharply and continued steady job growth. Lowering rates now will ensure that we do not cause unnecessary and harmful economic damage.”

In the letter, the lawmakers also warned that elevated interest rates are needlessly raising housing costs for families: “Not only are high rental costs overstating inflation numbers, keeping rates higher for longer will do nothing to solve the housing crisis, and instead may be exacerbating it by increasing the cost of new housing construction, restricting the supply of listings, and making it more expensive for families to buy new homes.”

“We believe that the Federal Reserve must begin to cut rates as soon as the next Federal Open Market Committee meeting. Doing so is warranted by the data, will preserve the economic progress that was so hard fought, and will allow workers and families to enjoy the benefits of a strong economy,” Whitehouse and Boyle concluded.

Chairman Whitehouse has joined Senator Elizabeth Warren (D-MA) and other colleagues to warn of the risks that the Fed's policy of persistently elevated rates pose to our economy, including blocking clean energy progress, making housing unaffordable, hurting small businesses, and possibly throwing millions of people out of work.

The full letter can be found HERE.