Following the vote by the Federal Open Market Committee (FOMC) to raise the federal funds rate target by 25 basis points, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, cautioned policymakers to carefully consider the adverse impact that further rate increases would entail for low income Americans and minority communities.
Ranking Member Waters released the following statement:
“Today’s decision by the Federal Open Market Committee to increase rates reflects the view that our economy has made substantial gains over the course of the recovery, but the fact remains that we still have a long way to go before the effects of the recovery are fully realized by millions of low-income and minority Americans.
I remain deeply concerned that the increase in rates will make it more expensive to borrow funds to pay for everything from college to cars and make it harder to pay down credit card balances, despite the fact that wages, particularly for low-income Americans, have yet to grow. Increasing rates and putting downward pressure on wages will leave many hardworking Americans ill-equipped to deal with the borrowing expenses that are necessary to pay for everyday needs.
And although unemployment has come down significantly since the depths of the crisis, the recovery has left many working families and minority communities behind. In fact, as of the most recent Employment Situation Summary released by the Bureau of Labor and Statistics, unemployment for African-Americans and Latinos remains well above the national average at 9.4 percent and 6.4 percent, respectively.
With inflation at historic lows, well below the Federal Reserve’s own target, and anemic growth abroad, the American public would be best served by policymakers who carefully consider how further raising rates could potentially make the path for those at the lowest income levels more difficult.”