Washington, D.C. — Marc Jarsulic, Vice President for Economic Policy at the Center for American Progress, released the following statement today after the Federal Reserve announced its intent to raise interest rates. The announcement arrives after the Federal Open Market Committee, or FOMC, met yesterday and today in Washington.
It is concerning that the Federal Open Market Committee has chosen to raise interest rates at this time. The state of prices, labor markets, and other economic indicators all suggest continued caution and the need to do more to support economic growth.
Since the recession, the United States has called on the Federal Reserve to do more to support the economy than ever before, and for the past seven years, the Fed has had to use nearly every tool available to counter economically unsound, contractionary fiscal policies emanating from parts of Washington. Without a doubt, the 13.7 million jobs the private sector has added over a record 69 consecutive months of employment growth would not have been possible without the Fed’s extraordinary, decisive, and objective efforts.
However, interest rate policy is not just an academic discussion. Americans are still waiting for significant wage growth, and today’s Fed decision makes that less likely. Higher rates will ensure that homes, cars, and other interest-sensitive items—goods that have been unusually strong drivers of this recovery—will be further out of reach for many Americans. Furthermore, the global headwinds that Council of Economic Advisers Chairman Jason Furman spoke of yesterday are an additional reminder that rate increases will drive up the dollar, making U.S. exports less competitive. The decision to increase rates is at odds with the actual state of the economy.
The following CAP experts are available for comment on today’s interest rate news:
For more information or to speak with an expert, contact Allison Preiss at email@example.com or 202.478.6331.