Trio of US Senators Ask Fed Chair Powell for 75-Basis-Point Rate Cut
Responding to weak inflation data, several lawmakers have pressured a leading central bank to lower interest rates.
Trio of US Senators Call for 75-Basis-Point Emergency Rate Cut by Federal Reserve
In a letter to Federal Reserve (Fed) Chair Jerome Powell, three Democratic senators, including Elizabeth Warren, Tina Smith, and Sheldon Whitehouse, have called for an emergency 75-basis-point interest rate cut to stimulate the economy.
Citing the recent weak inflation data, the senators argued that the Fed needs to take immediate action to prevent the economy from slipping into recession. They noted that core inflation, which excludes volatile food and energy prices, has remained below the Fed's 2% target for several months, raising concerns about the strength of the economic recovery.
The call for a large rate cut is a significant departure from the Fed's current policy of gradual rate increases. The Fed has been raising rates since December 2015 to prevent the economy from overheating. However, the recent economic data have raised concerns that the Fed may have tightened monetary policy too quickly, putting the economy at risk.
The Fed is expected to meet later this month to decide on interest rates. Powell has indicated that the Fed is likely to raise rates again, but he has also said that the Fed is closely monitoring the economic data and will adjust its policy as needed.
The senators' letter is a sign of growing pressure on the Fed to take action to support the economy. It remains to be seen whether the Fed will heed the senators' call for a 75-basis-point rate cut, but the letter is likely to add to the debate over the future of interest rates.
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