[Congressional Record Volume 140, Number 149 (Thursday, December 1, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: December 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                        INTEREST RATES--UP AGAIN

  Mr. DeCONCINI. Mr. President, I rise today to comment on the fact 
that the Federal Reserve once again has raised interest rates. In its 
never-ending quest to appease the ``gods of Wall Street,'' the Federal 
Reserve has raised interest rates--this time by three-fourths of a 
percentage point. The total Federal Reserve imposed increase in 
interest rates for 1994 is 2\1/2\ percent. Two and one-half percent--
that makes the brokers and bond traders happy and puts more Americans 
out of work.
  The Federal Reserve's stated goal is to slow economic growth in this 
country. Their objective: Approximately a 1 percent reduction in 
growth. The result? According to the Economic Policy Institute, this 
means a loss of over 1.3 million jobs.
  First we need to look at who benefits from the Federal Reserve 
policies. The simple answer is the wealthy. You will not find any 
middle-income Americans with large bond portfolios. The top 7 percent 
of households own 60 percent of the bonds. So these new higher rates 
are flowing to the wealthiest of Americans.
  Who is being hurt by the Federal Reserve policies? Again, the answer 
is simple: Working Americans.
  These new higher interest rates for credit cards, car loans, home 
loans disproportionately hit families with incomes under $50,000 
annually. These are the Americans most heavily dependent upon borrowing 
and least likely to be able to absorb these increases. Even before this 
latest increase was announced, home loans, interest rates for 30-year 
mortgages had jumped from 6.8 percent to 9.2 percent over the last 
year.
  The Federal Reserve seems to have forgotten that what drives this 
economy is the middle Americans who spend their money and can use that 
buying process, but not by higher interest rates. Unemployment is down, 
the economy is booming, and inflation is down. There is no 
justification for this latest rise, in my judgment.
  The middle Americans are the ones who buy the cars, homes, 
dishwashers, and other durable goods. They are the ones who keep our 
Americans employed. The Federal Reserve needs to get in touch with 
working Americans. They had better move fast before their Wall Street 
wealthy people find out that maybe the voters in this country want the 
middle Americans, the workers, to succeed in this economic growth, not 
just the wealthy.

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