A House Democratic lawmaker is urging the Federal Reserve to cut interest rates as soon as possible, warning that failure to do so could plunge the country into a recession.
"I am writing to call upon the Federal Reserve to immediately cut interest rates. Even though the Fed has a statutory dual mandate of price stability and maximum employment, it has swung the pendulum too far in the direction of the former to the detriment of the latter," Rep. Ritchie Torres, D-N.Y., wrote to Federal Reserve Chairman Jerome Powell on Tuesday.
"The rapidly changing conditions on the ground demand a monetary policy shift in favor of maximizing employment and economic growth."
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Torres, a member of the House Financial Services Committee, cited the recent July jobs report, which showed a significant slowdown from June's growth. The 114,000 jobs added in July were below expectations, while the unemployment rate ticked up slightly from 4.1% to 4.3%.
He also pointed to the global stock market's CBOE Volatility Index – nicknamed the "fear index," which hit a level not seen since the COVID-19 pandemic forced the world into an economic tailspin in March 2020.
"Time is running out. The longer the Fed takes to cut interest rates, the greater the risk of a recession. We may be fast approaching the point of no return," Torres said. "A recession is not an inevitability. It is a policy choice over which the Fed has singular power."
"The Fed has the power to stop playing recessionary Russian roulette. It has the power to save the economy from the self-inflicted wounds of a kamikaze interest rate policy that has kept rates too high for too long, inflicting too much damage on too many families and businesses."
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A spokesperson told Fox News Digital that the Fed has received the letter and is planning to respond.
The Federal Reserve left interest rates unchanged after its last meeting on July 31. Powell previously enacted a series of rate hikes to combat soaring inflation rates in the early half of Biden's term, which peaked at just over 9% in June 2022.
But the most recent stock market turmoil and the lackluster jobs report have prompted renewed pressure on the Fed to begin lowering interest rates or risk a serious economic downturn.
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Powell suggested in a press conference last week that lowering interest rates too soon could prompt inflationary growth. But he opened the door to the possibility when the Fed next meets.
"I think it’s a difficult judgment to make, and what you see as the judgment of the committee is that that time is drawing near. That time could be in September, if the data support that," he said.