Democratic Senators Call for Fed to Cut Rates by 75 Basis Points
Sens. Elizabeth Warren and Tina Smith say the Fed should take bolder action to combat inflation.
The senators argue that a 75 basis point cut would help to lower interest rates and stimulate economic growth.
Democratic Sens. Elizabeth Warren and Tina Smith are calling on the Federal Reserve to cut interest rates by 75 basis points at its next meeting. In a letter to Fed Chair Jerome Powell, the senators argue that the Fed needs to take bolder action to combat inflation and support the economy.
"The Fed has a responsibility to use all the tools at its disposal to bring inflation down and support economic growth," the senators wrote. "We believe that a 75 basis point cut is necessary to do that."
The senators' call for a 75 basis point cut is more aggressive than most economists expect. The consensus forecast is for the Fed to raise rates by 50 basis points at its next meeting. However, the senators argue that the Fed needs to take a more aggressive approach to combat inflation.
"Inflation is eroding the purchasing power of American families and businesses. It is also making it more difficult for businesses to invest and grow," the senators wrote. "The Fed needs to take bolder action to bring inflation down and support the economy."
The Fed is expected to make a decision on interest rates at its next meeting on March 15-16.
It is unclear whether the Fed will follow the senators' advice and cut rates by 75 basis points. However, the senators' letter is a sign of growing pressure on the Fed to take more aggressive action to combat inflation.
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