Sen. Bernie Sanders (I-Vermont) slammed the Federal Reserve’s decision on Wednesday to raise interest rates.
Sanders released a statement after the Fed announced on Wednesday that it would raise rates for the first time since 2006, saying the decision would stunt economic growth and hurt families who still have not entirely recovered from the effects of the recession.
“When millions of Americans are working longer hours for lower wages, the Federal Reserve’s decision to raise interest rates is bad news for working families,” Sanders said in the statement.
“At a time when real unemployment is nearly 10 per cent and youth unemployment is off the charts, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people. The Fed should act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago.”
On Tuesday, the Federal Open Market Committee announced that it would raise its short-term lending rate from an historic era of near 0% interest rates to the target range of the federal funds rate by 25 basis points. The decision was unanimous.
The bank has kept interest rates low in order to spur economic growth following the worst economic recession since the Great Depression. But as the US economy has steadily improved, many economists have become concerned that the Fed’s decision to keep rates low could lead to inflation.
For his part, Sanders has been vocal about his opposition to raising interest rates and scepticism about how the Fed is run. Sanders has repeatedly called for an audit of the Federal Reserve, and he supports removing some financial-industry leaders from the Fed’s governing board.
In a section dedicated to the central bank’s policy on his campaign website, Sanders says worries about inflation are “not a rational fear.”
“Anxiety about inflation, while all but omnipresent in some circles, is not a rational fear,” Sanders’ campaign website says. “A slow rise in prices (0.2 per cent in the 12 months ending in July, as opposed to the Fed’s recommended 2 per cent per year) tells us that inflation is not exactly looming on the horizon.”
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