Watchdog: Further Interest Rate Hikes Risk Recession

Following the U.S. Labor Department’s Consumer Price Index report showing corporate profiteering remains largely unfazed by the Fed’s repeated interest rate hikes, government watchdog Accountable.US renewed calls on the Fed to cease further hikes for the foreseeable future. A chorus of experts have warned continuing to raise rates would needlessly and unnecessarily cause a recession and result in millions of Americans losing their jobs. Economic indicators already show that the economy is responding to the previous rate hikes, and yet some members of the Federal Open Market Committee (FOMC) are wrongly considering doing more. Even still, other members admit higher rates could spur a recession. *See roundup of recent statements from FOMC members below.

“The Federal Reserve would jeopardize today’s positive economic news if it decides to drive up interest rates and needlessly push us into a recession. Even higher rates would mean fewer jobs and do nothing to curb the corporate greed epidemic.” said Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power. “A recession is not inevitable, but the Fed has done the economy no favors. It’s time they cut their losses before the economy really goes south and let Congress use the power it has to rein in corporate profiteering.”

ROUNDUP: More Fed Board Members Agree We Don’t Need More Interest Rate Hikes

• Philadelphia Federal Reserve President And FOMC Member Patrick Harker
  • Statement made on August 8, 2023:
    • CNBC: “Absent any alarming new data between now and mid-September, I believe we may be at the point where we can be patient and hold rates steady and let the monetary policy actions we have taken do their work,” Harker said in prepared remarks for a speech in Philadelphia.

• Chicago Federal Reserve President And FOMC Member Austan D. Goolsbee
  • Statement made on August 4, 2023:
    • Fortune: Chicago Fed President Austan Goolsbee, speaking in a separate interview with Westin, said policymakers will need to be patient through the disinflation process, and is hopeful the central bank can bring inflation down to its 2% target without causing a recession. They will soon need to start thinking about when to hold interest rates steady, and for how long, he said. “Rather than arguing about the peak rate, of how many more rate increases do there need to be, what we should probably start thinking about is how long does this last, that you’re going to be at these elevated rates,” Goolsbee said.

• New York Federal Reserve President And FOMC Member John C. Williams
  • Statement made on August 2, 2023
    • NYT: “I think we’re pretty close to what a peak rate would be, and the question will really be — once we have a good understanding of that, how long will we need to keep policy in a restrictive stance, and what does that mean.”

• Atlanta Federal Reserve President and Alternate FOMC Member Raphael W. Bostic
  • Statement made on August 4, 2023
    • Fortune: “I expected the economy to slow down in a fairly orderly way, and this number — 187,000 — comes in continuing that pace,” Atlanta Fed President Raphael Bostic said Friday on Bloomberg Television’s Wall Street Week with David Westin, referring to the July hiring figure in a monthly jobs report published earlier in the day. “I’m comfortable. I’m not expecting this to be over in a short period of time,” Bostic added in reference to the slowdown, suggesting he doesn’t see any need for additional rate hikes.