“The Fed's high interest rates drive up housing and insurance costs – putting a real strain on people's wallets. It's time for the Fed to lower interest rates.” Elizabeth Warren said
Democrats in Congress urged the US Federal Reserve on Monday to immediately start lowering interest rates, warning that the central bank's tight monetary policy would worsen the country's housing crisis and threaten to derail strong job growth.
In a letter to Fed Chair Jerome Powell ahead of the Federal Open Market Committee's (FOMC) two-day policy meeting starting Tuesday, a trio of Democratic senators led by Sen. Elizabeth Warren (D-Mass.) wrote that the central bank's 11th rate hike since March 2022 "had the opposite impact than expected" by "increasing the cost of housing and auto insurance, which are currently the main drivers of the overall inflation rate."
“The country is already facing a severe housing shortage, and the Fed's refusal to lower interest rates is exacerbating this shortage and driving inflation rates higher,” the senators wrote. “Lower mortgage interest rates will encourage more people to sell their homes, which in turn will increase housing supply, lower prices, ease rental costs, and ultimately increase homeownership.”
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