Three Democratic Senators Urge The Federal Reserve To Cut Rates At Its Meeting This Week

The Federal Reserve should cut interest rates this week for the first time since the onset of the COVID-19 pandemic, three Democratic senators said Monday in a letter to its chairman, Jerome Powell.

“The Fed’s monetary policy is not helping to reduce inflation. Indeed, it is driving up housing and auto insurance costs — two of the key drivers of inflation — threatening the health of the economy and risking a recession that could push thousands of American workers out of their jobs,” wrote Sens. Elizabeth Warren (D-Mass.), Jacky Rosen (D-Nev.) and John Hickenlooper (D-Colo.) in the letter sent to the Fed on Monday and obtained by HuffPost.

“You have kept interest rates too high for too long: it is time to cut rates,” the trio said.

The Federal Open Market Committee, the panel of Fed governors and regional bank presidents that sets monetary policy for the world’s most powerful central bank, is slated to meet Tuesday and Wednesday to discuss whether to move rates.

Economists don’t expect the FOMC to change rates, though the post-meeting statement and Powell’s press conference will be closely examined for clues about when it may do so. In a survey of 116 economists by financial wire service Reuters , 74 said they did not expect a cut until September. That survey was taken before Friday’s May jobs report, which showed a bigger-than-expected gain of 272,000 in payrolls , a sign of economic strength that could delay a rate cut even further.

The Fed has not cut its key federal funds rate since March 2020, when it slashed it by a huge 100 basis points as the COVID-19 pandemic began dragging down the U.S. and global economies.

Warren, Rosen and Hickenlooper said waiting to cut would be a mistake, citing actions by other