WASHINGTON, D.C. – U.S. Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, delivered an opening statement at a hearing titled “The Semiannual Monetary Policy Report to the Congress.”
Senator Brown began by welcoming Federal Reserve Chair Jerome Powell and emphasized the economic disparities faced by Americans. "Ohioans know and Americans know that our economy fundamentally is not a fair playing field," he stated.
Brown criticized large corporations for their role in economic inequality. "Corporations squeeze every last penny from Americans’ pocketbooks and workers’ paychecks," he said. He also highlighted rising costs and limited choices for consumers.
Addressing the Federal Reserve's mandate to control inflation, Brown argued that raising interest rates does not tackle the root causes of rising prices, which he attributed to corporate greed. "Keeping rates too high for too long threatens workers’ paychecks while keeping other costs high – particularly housing," he remarked.
Brown pointed out that higher interest rates have significantly increased the income required for families to qualify for mortgages, exacerbating the housing supply shortage. He noted that this has made home ownership less accessible to middle-class families.
He further explained how higher borrowing costs affect working families who rely on credit for essential purchases. "Credit card interest rates are reaching all-time highs," Brown noted, adding that banks are profiting at the expense of financially strained Americans.
Brown urged the Federal Reserve to consider these trade-offs when setting economic policy. "Every month that the Fed keeps rates high, it costs Americans money by making it more expensive to buy a house and borrow money," he stated.
The senator also discussed his efforts with colleagues to hold corporations accountable and lower housing costs. He highlighted his work in capping insulin prices for senior citizens and extending such measures to all Americans.
Brown addressed bank capital requirements proposed by regulators last year, stressing their importance in protecting taxpayers rather than benefiting investors or executives. He criticized large banks' opposition to these proposals: "The biggest banks have spent obscene amounts of money attacking this proposal."
He also called attention to incentive-based compensation models in banking that encourage risky behavior leading to potential failures like those seen in 2008 and more recently with SVB and Signature Bank.
On mergers and acquisitions between banks, Brown expressed concern over reduced competition resulting from such consolidations: "Consumers have lost trusted local banks, and small businesses have lost longtime banking partners."
Finally, Brown underscored the need for stringent ethical standards within the Federal Reserve. He called for clear penalties against officials who exploit confidential information for personal gain: "A rule with no consequences isn’t much of a rule at all."
In conclusion, Senator Brown urged Chair Powell to ensure that economic policies benefit all Americans rather than just Wall Street executives. "I look forward to hearing today how the Fed will balance its dual mandate, protect Americans’ money, and foster an economy that upholds the dignity of work," he said.