Prosperity Now

08/06/2024 | Press release | Distributed by Public on 08/07/2024 14:43

Prosperity Now Statement on Market Volatility, Need for Interest Rate Reduction

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For Immediate Release:
August 6, 2024

Contact:
Brad Bauman (202) 520-2155
[email protected]WASHINGTON- In the wake of yesterday's stock market selloff representing the worst trading day in two years, Prosperity Now issued the following statement calling on the Federal Reserve to consider early action on interest rates rather than waiting for the Board's next meeting in September. For three consecutive trading days, markets have been roiled by growing fears of an economic slowdown fueled in part by Friday's job numbers which failed to meet Wall Street expectations. Yesterday the Dow Jones Industrial Average lost 1034 points, the S&P 500 slid by 160 points and NASDAQ lost 3.4% of its value.

Despite some recovery in the markets as of 10:00 AM, on August 6th, 2024, the previous days' sell offs, coupled with the weaker than expected job numbers last Friday send a clear message around the stability of the US economy and warrants additional scrutiny from the Fed before their September meeting.

"The Federal Reserve Board was largely successful in its goal of cooling inflation with its successive rate hikes in 2022 and 2023, but there is now a preponderance of evidence that interest rates are impeding investment and growth," said Marisa Calderon, President and CEO of Prosperity Now.

"Interest rates this high are keeping small businesses from borrowing and investing in their own growth, they are keeping potential homeowners out of the housing market and these effects are having a negative impact on the economy as a whole. The Fed doesn't have to wait until September to adjust rates and give the economy a boost, and we believe they should take that step to protect the incredible gains the economy has made since the end of the pandemic."

Background:

  • The Federal Reserve Board is scheduled to meet again in September to discuss the Federal Funds Rate.
  • The Fed has cut rates at nine emergency meetings in the last 30 years
  • The current Fed rate is 5.5%, which has remained unchanged since the Federal Open Market Committee established the rate in July of 2023
  • From March of 2022 until July of 2023, the Fed raised interest rates 11 times in order to cool inflation.

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About Prosperity Now -- Since 1979, Prosperity Nowhas been a persistent voice championing economic opportunity, innovating outside of and beyond existing systems to build power for all communities. We advance racial and ethnic economic justice by investing in bold new ideas, and we work deeply at both the grassroots and national level to impact the entire ecosystem. By setting goals for our economy and following through with targeted approaches based on need, we are equipped to drive forward and cement big structural solutions. Learn more at www.prosperitynow.org.