Oct 28, 2022 - Economy

Senate Democrats aren't happy with the Fed

Ohio Senator Sherrod Brown

Sen. Sherrod Brown of Ohio. Photo: Jonathan Ernst/Reuters/Bloomberg via Getty Images

In separate letters to Federal Reserve chairman Jerome Powell this week, two Democratic lawmakers — Sens. Sherrod Brown of Ohio and John Hickenlooper of Colorado — called on the U.S. central bank to slow its aggressive pace of interest rate hikes.

Why it matters: The Biden administration and many congressional Democrats have generally supported the Fed's rate-hiking campaign to fight record-high inflation, but now that appears to be changing as the policies bite. More Democrats are warning about potential damage to the labor market and other parts of the economy from the Fed's moves.

  • Notably, while Brown and pointed Powell critic Sen. Elizabeth Warren are from the left flank of the party, Hickenlooper is more of a centrist.
  • Following the Fed's last policy meeting, when officials raised interest rates by a historically large 75-basis points, Warren tweeted: "Destroying jobs and crushing wages of millions of workers is reckless and dangerous."
  • The tone from other Democrats this week was more measured, but the message was similar.

What they're saying: "High inflation necessitates a response. But the concern is the Fed is doing too much, too quickly," Hickenlooper wrote in a letter Thursday. "We should wait to see the effects on the economy and how those changes are absorbed."

  • In a letter earlier this week, Brown, who chairs the powerful Senate Banking Committee, warned about the hit to the labor market: "For working Americans who already feel the crush of inflation, job losses will make it much worse."

Of note: Powell hasn't testified on Capitol Hill since June. At the next appearance, he could get an earful.

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