The Federal Reserve’s decision this week to raise interest rates by 25 basis points to a range of 0.75 – 1.00 percent drew mixed reactions from federal lawmakers.
“I want to be clear about what the Federal Reserve’s decision to raise interest rates today does: it pulls the rug out from under job and wage growth,” Sen. Martin Heinrich (D-NM), ranking member of the Congressional Joint Economic Committee, said.“After decades of stagnation, American workers have only begun to see wages grow overall in the recent few years, though job and wage growth has yet to return to many parts of the country. By suppressing wage growth, the Fed’s decision risks locking-in the economic losses suffered by America’s working families since the start of the Great Recession and limiting which Americans can share in the benefits of a growing economy.”
Rep. Pat Tiberi (R-OH), chairman of the Joint Economic Committee, supports the Federal Reserve hike.
“The Fed’s step toward more normalized rates indicates growing confidence that our economy will strengthen as the Administration and Congress follow through on our promises to lift artificial constraints on economic growth such as overly burdensome regulations, an outdated and uncompetitive tax code, and a collapsing health care law,” Tiberi said. “I am encouraged that we are moving beyond slow, uneven growth toward a period of prosperity for all.”
It is the second interest rate increase in the past three months as the Federal Reserve raised rates at its December 2016 Federal Open Markets Committee meeting.
In raising rates, the Federal Reserve said, “the Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term. Near-term risks to the economic outlook appear roughly balanced.”