US Fed Rate Cut: Sen. Warren Calls For 0.75% Reduction, Crypto To Rally?

Three Democratic senators, led by Elizabeth Warren, are urging Federal Reserve Chair Jerome Powell to slash the central bank’s interest rate by 75 basis points to safeguard the U.S. economy. In a letter sent to Powell on Monday, Warren, along with Senators Sheldon Whitehouse and John Hickenlooper, emphasized the urgency of a Fed rate cut to avoid the risk of the economy tipping into a recession.

Senators Urge 0.75% Fed Rate Cut

“If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession,” the senators stated in the letter. They argued that an aggressive approach, especially in the short term, would help mitigate potential risks, particularly in the labor market.

As the Fed prepares for its first rate reduction since 2020, lawmakers, investors, and political figures alike are watching closely. Although the Federal Reserve consistently asserts that its decisions remain independent of political pressures, it is clear the institution is facing scrutiny from various quarters.

Warren and her colleagues represent one side of the debate. They favor faster and steeper Fed rate cuts. However, figures like former President Donald Trump have expressed caution about changing rates ahead of the upcoming presidential election.

Currently, Fed policymakers are expected to announce their decision on Wednesday at the conclusion of their two-day meeting. While a rate cut has been widely anticipated, the magnitude of the reduction remains uncertain. Hence, market participants are speculating that the Fed could opt for a 0.25% or 0.50% cut.

However, the senators are advocating for a much larger cut of 75 basis points. This would mark a significant deviation from the typical quarter-point adjustments usually made by the central bank.

Follow Us

Like

Share

Comment

Repost