[Congressional Record Volume 141, Number 20 (Wednesday, February 1, 1995)]
[House]
[Page H979]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page H979]]
                              {time}  1130
        FED'S THREATENED INTEREST RATE HIKE SEEN AS UNJUSTIFIED

  (Mr. VENTO asked and was given permission to address the House for 1 
minute.)
  Mr. VENTO. Mr. Speaker, today the Federal Reserve Board is meeting, 
and the speculation is that they are going to raise interest rates to 
tighten monetary policy by raising the discount rate gain. They have 
raised the discount rate six times in the last year. This will be the 
seventh increase, which has resulted already in over a 2\1/2\ percent, 
250 basis point increase in the spread in terms of interest rates paid 
for by American consumers.
  Of course, the fact is that the record indicates that this is simply 
not justified or necessary. Workers today are receiving very little 
increase in terms of compensation or wages, and the fact is that by not 
taking a raise, they are now going to in essence be faced with 
increased costs because of interest rates.
  Car sales are down; home sales are down. Many of the indices in the 
American economy indicate that inflation is under control and the 
economy is not overheating, but the Fed is losing the capacity to deal 
with the responsibility of monetary policy by raising rates and by 
tightening monetary policy when it is not necessary.
  Mr. Speaker, I hope the Federal Reserve Board today is listening 
behind their closed doors as they make this decision. We need them to 
play an independent and an objective role, not to overmanipulate and 
steal defeat from the jaws of victory when we have an economy in which 
Americans are working.


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