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To: Federal Reserve and Congress

Stop Engineering a Recession!

Demand Progress

The Federal Reserve must stop engineering a recession and hurting working people!

Why is this important?

The Federal Reserve is reportedly set to hike interest rates yet again next week. Trump-nominated Fed Chair Jerome Powell is still claiming he can cut interest rates without driving a recession — but the Fed’s own research suggests the exact opposite.

Jerome Powell knows tight monetary policy will hurt working people and cause a recession and he doesn’t care. We need to send him a message.

In Powell’s own words, his plan to tackle inflation is “to get wages down and then get inflation down.”[2] Powell’s claim that working people must suffer in order to reduce inflation is patently false — and it was perfectly predictable that he’d mishandle the economy this way.

Back in September 2021, Senator Elizabeth Warren sounded the alarm about what might happen if Biden renominated Trump’s Fed Chair. Powell has “regularly voted to deregulate Wall Street,” Warren pointed out. Biden was making a “gamble” that Powell wouldn’t “drive this economy over a financial cliff again.” Now, Powell’s doing exactly that.

Just as Jerome Powell was announcing the rate hike last week, the Fed came out with a study showing rate hikes hurt working people and the economy much more than is usually acknowledged.

The Fed’s own study essentially says the Fed’s policies can drive up unemployment much faster than the Fed can respond. It’s clear the government should be looking for more reliable, and productive, responses to inflation.

Research shows that Congress — not the Fed — can tackle inflation in ways that actually help working people, such as stopping corporate price gouging and protecting domestic workers’ rights. Powell knows he’s manufacturing a recession that will hurt working people, especially people of color. We need to send him a message: knock it off, and clear the way for Congress to productively address inflation!



2022-11-29 03:32:20 -0500

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