Warren and Democratic Senators Urge Fed to Cut Rates by 75 Basis Points by Wednesday

Sep 16, 2024, 02:38 PM

Several Democratic senators, including Elizabeth Warren, Sheldon Whitehouse, and John Hickenlooper, have formally urged Federal Reserve Chairman Jerome Powell to implement a significant interest rate cut of 75 basis points. The senators argue that the current federal funds rate, which has remained in the 5.25-5.5 percent range for a year, needs to be reduced to protect the US economy from potential harm. This request comes amid a broader debate on the appropriate monetary policy to support economic stability, with some market observers predicting a smaller rate cut. The senators' letter, initially sent in Summer, emphasizes the urgency of the situation, reflecting concerns over economic conditions and the potential impact of maintaining high interest rates. The push for a 75 basis points cut is set against market expectations of a 0.25% cut with a 43% probability and a 0.50% cut leading at 57%, according to CME's FedWatch. The decision is anticipated on Wednesday.