Washington, D.C — This week, Federal Reserve Chair Powell testified before Congress to discuss the Fed’s latest semiannual “Monetary Policy Report.” The report and Chair Powell’s testimony confirmed the Fed’s commitment to continued interest rate hikes in an effort to achieve its 2 percent inflation target.
Chair Powell drew criticism from Senator Elizabeth Warren (D-MA) and Representative Ayanna Pressley (D-MA) who questioned the effectiveness of and the resulting harm from persistent rate hikes. Senator Warren pressed Chair Powell stating that the Fed is “gambling with people’s lives” by “clinging to the idea that there is only one solution: lay off millions of workers.” Representative Pressley pointed out the disproportionate harm to vulnerable communities that the Fed seems to be neglecting, stating that the Fed’s approach is “more like the assertions of a greedy corporation than someone who has a public mission on behalf of the people of this country”
In response, Positive Money’s lead campaigner Akiksha Chatterji said,
“What the Fed is doing to tackle inflation is basically sacrificing the well-being of millions of working Americans by manufacturing unemployment. Sen. Warren and Rep. Pressley were right to shine a spotlight on what’s really going on — the Fed’s blind commitment to interest rate hikes means people’s livelihoods are being toyed with to achieve some abstract statistic.
Rate hikes won’t stop corporate profiteering, or end the war in Ukraine, or ease supply-chain snarls. That’s why we need to look to Congress for more precise tools and fairer ways to achieve price stability. What this moment really demands is a reassessment of the old doctrines underpinning monetary policymaking.”