Another Democratic Senator Pressures Fed Ahead of Expected Rate Hike

(Bloomberg) -- Senate Democrat John Hickenlooper called on the Federal Reserve to pause its aggressive campaign to curb inflation, seeking to pressure the central bank ahead of its anticipated decision next week to raise interest rates by another 75 basis points.

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“High inflation necessitates a response. But the concern is the Fed is doing too much, too quickly,” the lawmaker from Colorado wrote in a letter Thursday. “I write to urge the Federal Reserve to pause and seriously consider the negative consequences of again raising interest rates.”

While Hickenlooper isn’t up for reelection this year, his letter was the latest public sign of mounting anxiety among Democrats ahead of Nov. 8 midterm polls where voter anger over the economy, amid the highest inflation in 40 years, could cost them control of Congress.

Fellow Democrat and Senate Banking Committee Chair Sherrod Brown on Tuesday urged the Fed to remember its dual mandate for both price stability and maximum employment. The lawmakers’ public demands amplify the political conversation around the Fed as it prepares to meet Nov. 1-2.

Investors fully anticipate the central bank will deliver its fourth straight increase of three-quarters of a point, after already lifting its benchmark from near zero in March to 3% to 3.25%. The Fed’s most aggressive tightening campaign since the 1980s has been unleashed to cool price pressures that policymakers failed to predict. Officials acknowledge that this could hurt the economy and jobs but say the actions are necessary.

Hickenlooper said that it risks causing unnecessary pain.

“It has already taken drastic action by raising rates by so much in a short period of time. We should wait to see the effects on the economy and how those changes are absorbed,” he wrote. “Raising rates now when prices may come down would be foolish and damaging to American consumers and small businesses.”

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