Warren, Boyle, Jayapal, Lawmakers to Fed Chair Powell: Pause Rate Hikes or Risk Recession, Destroying Jobs, Crushing Small Businesses

Press Release

"We remain deeply concerned that the Fed risks throwing millions of Americans out of work in its drive to raise interest rates even higher -- even as Fed staff have already projected a recession this year amid financial market headwinds and even as you have acknowledged that inflation can slow without destroying the labor market, that the most significant drivers of inflation are not demand-based, and that the economy has not yet experienced the full impact of its earlier rate increases. The Fed should pause its rate hikes at the upcoming FOMC policy meeting.

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History casts doubt on the Fed's ability to engineer an unemployment rate that just "rise(s) a bit.' The FOMC's March forecast shows that the Fed seeks to drive the unemployment rate up by a percentage point this year, from 3.5% in March to 4.5%. But analysts note that since World War II, the unemployment rate has never increased by one percentage point within a year outside of a recession: the unemployment rate has increased by one percentage point 12 times since 1945, and in all 12 times that increase has been in the context of a recession. And every time the unemployment rate increased by a full percentage point, it continued to increase far beyond that level."

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