Democratic Senators Urge Federal Reserve to Cut Interest Rates in 2024

After the Federal Reserve repeatedly raised interest rates throughout 2022 and 2023 in its efforts to tame inflation, which hit a 40-year high of 9.1% in June 2022, inflation has since cooled significantly. In December, consumer prices were up just 3.4% year-over-year, and the Fed has held off on any further rate hikes at its three most recent meetings. 

Even so, several Democratic senators stress that the Federal Reserve needs to cut interest rates this year to help ease the ongoing housing access and affordability crisis, The Hill reports.

In a letter to Fed chair Jerome Powell, Sens. Elizabeth Warren (D-Mass.), John Hickenlooper (D-Colo.), Jacky Rosen (D-Nev.), and Sheldon Whitehouse (D-R.I.) said the Fed’s decision to rapidly raise rates has resulted in higher housing costs for both homebuyers and renters, as well as a lack of new home construction. The senators warn that high interest rates continue to make it difficult for many Americans to afford rent or buy their first home, and this lack of affordability disparately affects Black and Hispanic households.

“As the Fed weighs its next steps in the new year, we urge you to consider the effects of your interest rate decisions on the housing market and to reverse the troubling rate hikes that have put affordable housing out of reach for too many,” the group wrote in Sunday’s letter.

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