Richard Stern, director of the Grover M. Hermann Center for the Federal Budget, has responded to the Federal Reserve's recent decision to lower interest rates by 0.50 percentage points. This rate cut, the first since 2020, occurs just seven weeks before Election Day.
Stern expressed his concerns regarding the implications of this monetary policy shift. "Today marks a new chapter in the DC Cartel’s long march toward the bankruptcy of our nation," he stated. While acknowledging that the rate cut may offer some relief from high interest rates, Stern warned it could reignite inflation, with prices for essentials already rising over 20%. He criticized the move for not prioritizing American interests.
"The federal government has recklessly expanded in recent years," Stern continued, emphasizing how increased federal debt burdens Americans. He described a difficult choice faced by the Federal Reserve: either print more money and trigger inflation or avoid printing and impose high interest rates on credit cards, prospective homeowners, and small business owners.
Stern concluded with a stark metaphor: "Without cutting government spending, this is merely rearranging deck chairs on the Titanic of debt. The federal deficit is the bank robber, the Fed is the getaway driver, and you are the bank."
