Senator Elizabeth Warren Calls on Fed to Cut Rates by 0.75 Percentage Points

The Fed Should Ignore Warren's Call to Cut Rates

Senator Elizabeth Warren (D-MA) recently called on the Federal Reserve to cut interest rates by 0.75 percentage points. Warren argued that such a move would help to boost economic growth and create jobs. However, the Fed should ignore Warren's call for several reasons.

First: The economy is already growing at a healthy pace. According to the Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 3.1% in the first quarter of 2019. This is above the Fed's target rate of 2%.

Second: Inflation is low and stable. The Fed's preferred measure of inflation, the core personal consumption expenditures (PCE) price index, has been running below 2% for the past year.

Third: Cutting interest rates could lead to financial instability. Reducing interest rates would make it cheaper for people to borrow money, but it could also lead to higher levels of debt. This could increase the risk of a financial crisis.

In conclusion, the Fed should ignore Warren's call to cut interest rates by 0.75 percentage points. The economy is already growing at a healthy pace, inflation is low and stable, and cutting rates could lead to financial instability.