Not every Democrat loves the way this country has been governed over the past few years. Now they’re speaking up.
And now a House Democrat broke ranks with the White House with a sudden betrayal.
A sudden about face
Rep. Ritchie Torres has joined the growing number of voices demanding that the Federal Reserve act immediately to cut interest rates, warning that the Fed’s current approach is pushing the economy dangerously close to a recession.
In a strongly worded letter to Fed Chair Jerome H. Powell, Torres, a New York Democrat, insisted that the Fed make emergency rate cuts in response to a “softening” labor market.
This came after a disappointing July jobs report revealed unemployment had climbed to 4.3%, the highest it’s been in nearly two years.
Torres argued that the alarming jobs data, coupled with market jitters reminiscent of the early days of the COVID-19 pandemic and the 2008 financial crisis, are more than sufficient reasons for the Fed to take immediate action.
“Time is running out. The longer the Fed takes to cut interest rates, the greater the risk of a recession. We may be fast approaching the point of no return,” Torres warned.
He emphasized that a recession is not an unavoidable event but a result of the Fed’s policy decisions.
“The Fed must stop playing recessionary Russian roulette and save the economy from an increasingly self-destructive monetary policy that has kept interest rates too high for too long,” he wrote.
Torres’ urgent appeal came on the heels of significant losses in the stock market earlier in the week, which sparked panic and led to widespread sell-offs among investors.
While the markets briefly rebounded on Tuesday, they stumbled again on Wednesday, with the S&P 500 dropping by 0.7%, the Dow Jones Industrial Average falling 0.8%, and the Nasdaq slipping 1%.
The real reason for cutting rate
Some lawmakers, especially Democrats, are pushing for an emergency rate cut, partially out of concern that a deteriorating economy could hurt their chances in the upcoming November elections.
Despite the pressure, Powell decided against cutting interest rates during the Fed’s last policy meeting, opting instead to potentially target a rate cut in September.
He argued during a press conference that cutting rates too soon could lead to a resurgence of inflation.
“I think it’s a difficult judgment to make, and what you see as the judgment of the committee is that that time is drawing near,” Powell said. “That time could be in September if the data supports that.”
Meanwhile, many economists are warning that any emergency action by the Federal Reserve might only intensify investor panic, exacerbating the recent sell-offs.
Dean T. Smith, an economist at the College of Charleston, shared his concerns on X, stating that “an ’emergency’ cut by the Fed would worsen, not improve, the situation.”
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