As the Federal Reserve raised interest rates to a 16-year high, Rep. Maxine Waters (D-Calif.) issued a statement reminding the Fed of the risks of increasing interest rates unnecessarily. Waters is the ranking member of the House Committee on Financial Services.

The rate increase announcement is the 10th-consecutive hike since March 2022 and brought the target range for the federal funds rate to 5-5.25 percent in the hopes of maximizing employment and returning inflation to a rate of 2 percent “over the longer run.”

“The committee will closely monitor incoming information and assess the implications for monetary policy,” the Federal Reserve said in its Federal Open Market Committee (FOMC) statement. “In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The committee is strongly committed to returning inflation to its 2 percent objective.”

It was noted that unlike the previous rate hikes, the language indicating further increases was absent. This could be a signal this most recent hike is the last.

Waters said she was concerned about the harm the additional hike will pose to the housing market.

“Less than a month from a catastrophic default on our nation’s debt due to Republicans’ reckless games and two days after the third major bank failure of the year, the Federal Reserve has again decided to raise interest rates,” she stated in a release. “While I acknowledge the FOMC signaled they may finally pause their aggressive rate hikes, it is well past time that they do so. As I highlighted back in November, experts warned that the Fed’s aggressive rate hikes may be over-correcting for inflation and that it was important to pause and assess the impact of these rate hikes since it takes time for their full effect to be realized in the economy. Since then, we’ve seen Republicans engage in a dangerous form of brinksmanship with our nation’s full faith and credit, along with turmoil in the banking sector. It would be prudent for the Fed to allow for some time to pass to better assess the full impact of their rate hikes in the midst of a rapidly evolving economic landscape….

“[W]hile the Fed has a dual mandate to promote stability and economic employment, these hikes may very well have the exact opposite effect and instead push our country into a recession,” she said. “While I hope it’s not too late, I nevertheless implore the Fed to heed the concerns I shared in November before our economy is faced with a catastrophe that our most vulnerable communities will be forced to bear the brunt of.”

The concerns Waters referred to were expressed in a letter to Jereme Powell, the chair of the Board of Governors of the Federal Reserve System. More can be found here.