FOR IMMEDIATE RELEASE
July 27, 2023
Americans of Color Likely to Be “Collateral Damage” as Interest Rate Hikes Continue
Advocates Urge Fed to Consider Disparate Impact
CONTACT: Adam Briones, California Community Builders CEO, 510.961.3957, abriones@ccbuilders.org
BERKELEY, CALIFORNIA – As the Federal Reserve announced an interest rate hike of 25 basis points (0.25%) in its quest to tame inflation, advocates urged Chairman Powell and Fed governors to consider the harm these increases can inflict on communities of color. While the media have mostly focused on the increasing likelihood of a “Goldilocks scenario” – reduced inflation without pushing the economy into recession – California Community Builders and other civil rights leaders argued that policymakers must consider that what seems a “soft landing” for white and affluent Americans is actually a crash landing for others.
California Community Builders CEO Adam Briones said, “When California Community Builders, the Community Consumer Defense League, and other civil rights leaders from California and around the country met with Federal Reserve Chairman Powell and members of the Federal Reserve Board of Governors earlier in July, we shared stories of how rising rates disproportionately impact communities of color. Inflation harms everyone and price stability is important, but the Fed needs to be more forthright about the communities who will be collateral damage from Fed’s chosen inflation-fighting tool. Inducing a national unemployment rate of over 4% by the end of the year, as the Fed projects, will likely create close to 8% Black unemployment. That’s hardly the ‘soft landing’ economists are so fond of.”
John Gamboa, Chairman of the Community Consumer Defense League, commented, “Throughout the history of the U.S. regulatory system, people of color have been targeted for discrimination -- either directly such as redlining or indirectly through lax regulation such as led to the Great Recession. But even absent discriminatory actions, people of color have also been consistently treated as collateral damage by federal regulators in their attempts to cool inflation. What shouldn’t be lost in discussions of a ‘soft landing’ is that any effort that raises unemployment will disproportionately harm communities of color. While we respect Chairman Powell’s goal of price stability, we call on him and the entire Federal Reserve system to be more transparent and forthright about who is – and is not – harmed in their quest to get there.”
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CALIFORNIA COMMUNITY BUILDERS
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