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March 19, 2024

Pressley, Progressive Caucus Call for Federal Reserve to Lower Interest Rates

In a Hearing, Pressley Urged Powell to Cut Interest Rates to Boost Housing & Home Affordability Earlier This Month

Text of Letter (PDF)

WASHINGTON – Ahead of the Federal Reserve’s Board of Governors Federal Open Markets Committee meeting, Congresswoman Ayanna Pressley (MA-07) joined22 members of the House and Senate, led by the Congressional Progressive Caucus, to call on Federal Reserve Chairman Jerome Powell to quickly present a plan to start lowering interest rates that continue to squeeze working people. In a House Financial Services Committee hearing earlier this month, Rep. Pressley pressed Chairman Powell and urged him to cut interest rates to boost home affordability and construction of affordable housing.

“With core inflation already having come into line with the Federal Reserve’s target, today’s excessively contractionary monetary policy needlessly worsens housing market imbalances and the unaffordability of home ownership, creates risks for banking stability, and could threaten the achievements of strong employment and wage growth and its attendant reductions in economic and racial inequalities,” the members wrote.

The Federal Reserve has increased interest rates 11 times since March 2022 despite clear evidence that inflation has cooled to within the Fed’s target range, contradicting its argument for suppressing employment and worker pay and keeping mortgages high and loans unaffordable. 

“The data over the last year also provide evidence that we may be on a faster productivity growth path, which will further alleviate inflationary pressures. None of these indicators correspond with an overly strong labor market that could threaten to spike inflation. The more realistic concern in light of these labor-market trends is that the Federal Reserve may wait too long to lower rates and allow tight monetary policy to reduce employment and real wage growth,” the members wrote.

The impact of the Fed’s decision is particularly acute amidst a nationwide housing crisis. As the lawmakers emphasize, “the housing market is facing major imbalances and making homeownership unaffordable due to persistently high interest rates. New housing starts have fallen almost 20 percent from their April 2022 level. Existing home sales have fallen to a 30-year low.”

The full letter can be found here.

Signatories include: Representatives Pramila Jayapal (WA-07), Becca Balint (VT-AL), Nannette Barragán (CA-44), Jamaal Bowman, Ed.D. (NY-16), Greg Casar (TX-35), Steve Cohen (TN-09), Veronica Escobar (TX-16), Jésus “Chuy” García (IL-04), Steven Horsford (NV-04), Val Hoyle (OR-04), Jared Huffman (CA-02), Henry C. “Hank” Johnson (GA-04), James P. McGovern (MA-02), Jerrold Nadler (NY-12), Delia Ramírez (IL-03), Rashida Tlaib (MI-12), Juan Vargas (CA-52), and Frederica Wilson (FL-24) and Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA).