"The Fed's high interest rates are upping the cost of housing and insurance — that puts a real strain on people's pocketbooks. It's time for the Fed to lower interest rates." Said Elizabeth Warren
Democrats in Congress urged the U.S. Federal Reserve on Monday to begin cutting interest rates immediately, warning that the central bank's restrictive monetary policy is worsening the nation's housing crisis and threatening to derail a strong streak of job growth.
In a letter to Fed Chair Jerome Powell ahead of the Federal Open Market Committee's (FOMC) two-day policy meeting that begins Tuesday, a trio of Democratic senators led by Sen. Elizabeth Warren (D-Mass.) wrote that the central bank's 11 rate hikes since March 2022 are "having the opposite of [their] intended effect" by "driving up housing and auto insurance costs, 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 bring down interest rates is exacerbating this shortage and driving higher inflation rate," the senators wrote. "Lower mortgage rates would encourage more people to sell their homes, which would in turn increase housing supply, decrease prices, ease the costs of renting, and ultimately increase homeownership."
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