Democrats are pushing the Fed to take stronger action against rising prices
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Central Democrats are pushing the Federal Reserve to continue vigorously pursuing an economic policy to end it. rising prices, expressing concern over the recent political collapse.
The pressure on a major US bank from the Democratic Party’s central wing has intensified at a meeting of the Federal Open Market Committee next week, where Fed is expected to announce a rapid decline in purchases, which could lead to higher interest rates by the end of next year.
It shows the uncertainty in Joe Biden’s party that inflation could be dangerous for voters in the mid-2022 elections – and it will not be soon overshadowed by its child care and climate change laws, its $ 1.75tn fiscal policy, whose economic reforms are simply a problem. results in later years.
“The Fed should start to decline immediately and it should raise interest rates. All of this could happen by March,” Massachusetts Democrat Jake Auchincloss, a member of the House of Representatives’ finance committee, told Financial Services. Times.
“I think a chair [Jay] Powell would do well to end a decade of simple funding, “he added.
The democratic debate over rising inflation is growing with each new release. In November consumer prices went up by 6.8 percent compared to the previous year, its fastest moving since 1982.
Biden on Friday acknowledged that inflation was “a real hit on the road”, although White House officials continue to expect lower prices and are happy that oil prices have begun to fall.
After US President Powell re-elected Powell as chairman of the Fed, Biden also said he believed he was the best man to deal with rising prices, but the White House did not address the central bank’s policy.
Vocal support for the strongest funds has not yet been obtained from Democrats. The party has been emphasizing the need for the Fed to maintain a supportive role in restoring as much as possible in order to fully respect its mandate to seek all jobs that would benefit all sections of the population. Some prominent Democrats still insist that this should be a priority.
“In the meantime, as workers gain the capacity to work, we must continue to push all jobs and labor markets where companies compete with workers by offering higher wages and better benefits,” said Sherrod Brown, chairman of the Senate banking committee. and the Ohio Democrat, he said in a statement to FT.
“The Fed needs to make sure our economy works for workers and their families, not Wall Street,” he added.
But some want the central bank to move faster at inflation.
Joe Manchin, a Democratic senator for West Virginia, is an outspoken critic of the Fed’s purchases, and Mark Warner, a Virginia Democrat, urged Powell to speed up “reducing” purchases in last month’s case. .
“I believe that a lack of, and quick to say, can be as insurance as. . . we are seeing this economic growth, “Warner said on November 30.
Ian Katz, a researcher at Capital Alpha Partners, said the change was not surprising given the political turmoil faced by Democrats. “If inflation threatens metal “And the Democrats’ expectations for the election, there have been fewer pigeons,” he said.
One Democratic Congress candidate in the Senate said many Democrats, as well as members of the White House, are taking the price hike seriously because they realize this is a new “political era”.
“In the past, we’ve talked about a lot of jobs, well-paying jobs. We have it all now. But for most voters it doesn’t make sense. [like it]. The amount in their pockets does not increase. ”
More and more democracy is taking on a variety of forms – including criticism that the Fed’s loose policies are driving disunity. Jon Ossoff, Georgia’s Democratic senator, pressured Powell about the economic goal the borrower’s program is operating at a time when demand is “strong” and large markets are “very liquid”.
“Isn’t it, for example, when they give extra money to big markets, increasing inequality by raising inflation and accounting and transferring more money to big financial institutions, high-income people and investors?” Asked Ossoff.
Auchincloss said the Fed had better weapons than Biden and Congress had to deal with rising prices. “Money is like a carrier, it takes a long time to prepare, it travels a long time, it takes a long time to ship. It’s powerful, but it takes a while. Financial systems are like airplanes. They are very obedient, ”he said. “When it says it does something, it does it, but it can work in weeks and months.”
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