Democratic Senators Call on Fed to Cut Rates by 75 Basis Points

Fed Chair Powell has signaled a willingness to raise rates by 50 basis points

A group of Democratic senators is urging the Federal Reserve to cut interest rates by 75 basis points at its next meeting to help offset the economic damage caused by the coronavirus pandemic.

In a letter to Fed Chair Jerome Powell, the senators argue that the economic outlook has deteriorated significantly since the Fed's last meeting in March, and that a more aggressive rate cut is needed to prevent a recession.

The senators point to the recent surge in unemployment claims, as well as the sharp decline in consumer spending, as evidence that the economy is slowing down.

They also note that the Fed's current policy of raising rates is putting upward pressure on the value of the dollar, which is making it more difficult for U.S. businesses to export goods and services.

The senators' letter is the latest sign of growing pressure on the Fed to take more aggressive action to support the economy.

In recent weeks, a number of economists have also called for the Fed to cut rates by more than 50 basis points.

The Fed is scheduled to meet again on June 10-11. It is widely expected that the Fed will raise rates by 50 basis points at that meeting, but the senators' letter could lead the Fed to consider a more aggressive rate cut.

The Fed's decision on interest rates will be closely watched by financial markets. A more aggressive rate cut could help to boost stock prices and lower bond yields.