Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement at the semiannual full Committee hearing entitled, “Monetary Policy and the State of the Economy.”
Welcome back, Chair Powell, and congratulations on your confirmation as Chair of the Fed. Since you last came before the Committee, Americans continue to struggle to make ends meet as the price of housing, gas, and groceries have skyrocketed.
While it is important for the Fed to fight inflation, I would caution against any approach that ignores the Fed’s maximum employment mandate and results in a recession with millions of people losing their homes and jobs. You should have noted that last week the House passed my bill, H.R. 2543, The Financial Services Racial Equity, Inclusion, and Economic Justice Act, which directs the Federal Reserve to consider the impact of all of its decisions, including setting interest rates on communities of color and underserved communities.
Congress has a role in fighting inflation also. Housing is one of the largest contributors to inflation and the housing shortage has allowed corporate landlords to hike up rents, forcing families to make difficult cuts elsewhere in their budgets. The Fed’s interest rate hikes will make borrowing more expensive and thereby could help reduce out-of-control housing prices, but without action by Congress, inflationary pressures will remain because there is simply not enough affordable houses being built, and there won’t be until Congress makes necessary investments. That’s why it’s so important that we pass the housing title of the Build Back Better Act, which provides over $150 billion towards new housing construction, modernizing existing structures for the long term, and providing supports so people can be stably housed.
We are also facing corporate consolidation and greed. Without healthy competition to drive down prices, mega-corporations, driven by profit, are exploiting their economic power to squeeze Americans to the breaking point.
Democrats in Congress put forth solutions to tackle inflation, but my colleagues across the aisle have consistently voted against every solution. Let me go over some examples: Democrats passed a bill with $28 million in funding to address the baby formula shortage, but Republicans voted no. We passed legislation to crackdown on price gouging from oil and gas companies, and Republicans voted no. Last week Democrats passed my Racial Equity, Inclusion, and Economic Justice Act, and you guessed it, Republicans voted no.
Republicans can talk about the problems, but they have zero solutions.
Let’s also not forget that the Federal Reserve has more duties beyond monetary policy. Bank mergers and banking deserts are affecting access to credit for low-income consumers and communities of color. And working families who turned to cryptocurrency to generate wealth are now seeing their hard-earned savings disappear. Now more than ever, the Federal Reserve must work with other regulators to properly oversee the cryptocurrency market and provide guidance on a more stable alternative to volatile cryptocurrencies.
Lastly, the confirmations of Lisa Cook, Susan Collins, and Philip Jefferson are historic, but more must be done to ensure diversity at the Federal Reserve.
So, Chair Powell, I look forward to hearing your testimony this morning.