The Federal Reserve announced Wednesday a 10th interest rate hike on Wednesday, raising the rate to 5.25% — a 16-year high — as it continues its firefight against inflation. In a statement announcing the hike, it omitted previous language that signaled more hikes are likely.
Fed Chairman Jerome Powell faces pressure from politicians to stop raising rates, as fears of a recession increase. The most recent data show personal income levels increased by 0.3% from February to reach $67.9 billion, but inflation remains above the Federal Reserve’s target.
Democratic Sens. Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse and other lawmakers sent a letter to Powell saying that the Federal Reserve’s aggressive actions were threatening to throw millions of people out of work: “While the Fed should remain flexible to incoming data as it assesses the economy’s progress toward achieving lower inflation, the evidence to date suggests that progress can continue to be made without slamming the brakes on the economy and costing millions of Americans their jobs.” The lawmakers argued that Powell’s aggressive actions would end up hurting working families more than inflation has: “While we do not question the Fed’s policy independence, we believe that continuing to raise interest rates would be an abandonment of the Fed’s dual mandate to achieve both maximum employment and price stability and show little regard for the small businesses and working families that will get caught in the wreckage.”
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