U.S. Sen. John Hickenlooper called for the Federal Reserve to pause rising interest rates Thursday in a stern letter to Fed Chairman Jerome Powell.
The central bank has increased interest rates five times this year in an effort to combat skyrocketing inflation by slowing the economy and easing pressures on prices, The Washington Post reported. This has put benchmark lending rates up 3 percentage points since March — the fastest increase of that size since 1982.
“The risk is that higher interest rates will lead us into a potential recession, hurting the middle-class workers who have not seen wage gains in decades,” the Colorado Democrat’s letter reads. “A Federal Reserve overreach could crush wage increases and hurt workers who are blameless for inflation.”
Hickenlooper’s letter comes as Powell is expected to announce another hike in interest rates next week, in addition to new projections of the likely economic effect.
In the letter, Hickenlooper asks Powell to wait six months to a year before raising rates again, pointing to research showing that it can take that long for the full impact of interest rate changes to take effect.
Hickenlooper called the Fed’s actions “understandable” given the current state of inflation, but attributed the cause of the inflation to factors outside of the central bank’s control, such as continued Russian aggression in Ukraine, supply-chain issues and labor shortages. By quickly and repeatedly increasing interest rates, Hickenlooper accused the Fed of failing to stem inflation while hurting the economy.
“The Fed has been aggressive,” the letter reads. “Mortgage rates have skyrocketed, borrowing costs for Main Street businesses have risen, credit card payments have gone up as interest payments have climbed, car loans are becoming more expensive.”
Hickenlooper is the latest of a handful of Democrats to call out the Fed’s methods, including U.S. Sen. Elizabeth Warren of Massachusetts and U.S. Sen. Sherrod Brown of Ohio.
Mostly, though, Democrats and Republicans alike have stood behind Powell’s risky efforts to curb inflation despite the absence of progress so far, with Politico calling the lack of pushback an “extraordinary show of bipartisan support.”