Top Senate Democrat warns the Fed against causing mass job losses
Matt EganBy Matt Egan, CNN BusinessPublished 12:16 PM EDT, Wed October 26, 2022
New YorkCNN Business —
Democratic Sen. Sherrod Brown is warning the Federal Reserve not to attack inflation so aggressively that it undoes the historic progress in the jobs market.
민주당 상원의원 Sherrod Brown은 연방준비제도 이사회(FRB)에 인플레이션을 너무 공격적으로 공격하지 말라고 경고하고 있어 고용시장의 역사적인 진전을 망치고 있다.
“For working Americans who already feel the crush of inflation, job losses will make it much worse. We can’t risk the livelihoods of millions of Americans who can’t afford it,” Brown, chairman of the powerful Senate Banking Committee, wrote in a letter sent to Fed chairman Jerome Powell on Tuesday.
The comments from the Ohio Democrat, who publicly supported Powell’s renomination as Fed chair, underscore the intense pressure facing the Fed ahead of next week’s decision on interest rates. Republicans have urged the Fed to do more to get inflation under control, while some Democrats are concerned the Fed will do too much and spark a recession.
Brown clearly falls into that latter category, urging Powell not to “forget your responsibility to promote maximum employment and that the decisions you make at the next FOMC meeting [the Federal Open Market Committee, the central bank’s policymaking arm] reflect your commitment to the dual mandate.”
The Fed is making its most aggressive stand against inflation since the early 1980s. Next week, Fed officials are widely expected to lift interest rates by three-quarters of a percentage point, marking the fourth straight jumbo-sized rate hike. Bank of America estimates the US economy will start losing 175,000 jobs a month early next year due to the Fed’s rapid interest rate hikes.
In his letter, Brown reminded Powell about an important point of which he is surely aware: Interest rate hikes hit the economy with a lag, making it nearly impossible to understand their full impact in real time. That means the Fed won’t know that it has gone too far with its fight against inflation until it’s too late.
그의 편지에서 브라운은 파월에게 자신이 확실히 알고 있는 중요한 점에 대해 상기시켰다. 금리 인상은 경기 침체를 불러와 실시간으로 그 영향을 완전히 이해하는 것은 거의 불가능하게 만들었다. 그것은 연준이 너무 늦을 때까지 인플레이션과의 싸움을 너무 많이 했다는 것을 알지 못할 것이라는 것을 의미한다.
Some progressives have been more explicit in their criticism of the Fed. California Rep. Ro Khanna slammed the central bank for “failed policy” that led to high inflation and expressed concern the Fed will now overcompensate.
“I blame the Fed and I blame Powell for mismanaging the situation in the first place,” Khanna told CNN earlier this month in a phone interview.
Massachusetts Democratic Sen. Elizabeth Warren has described the Fed’s rate hikes as “extreme” and set the stage for blaming the central bank for a downturn.
매사추세츠 민주당 상원의원 엘리자베스 워런은 연준의 금리 인상을 "극심하다"라고 표현하며, 경기 침체의 원인을 중앙은행 탓으로 돌릴 수 있는 발판을 마련했다.
“I’ve been warning that Chair Powell’s Fed would throw millions of Americans out of work — and I fear he’s already on the path to doing so,” Warren said on Twitter last month.
워렌은 지난달 트위터에서 "나는 파월 의장의 연준이 수백만 명의 미국인을 실직시킬 것이라고 경고해 왔다"며 "그는 이미 그렇게 하는 길을 걷고 있는 것 같다"라고 말했다.
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