WASHINGTON -- House Banking Committee chairman Henry Gonzalez, D-Tex. yesterday urged President Clinton to speak out publicly against any further credit-tightening moves by the Federal Reserve.
"Although you have chosen to remain silent about the Federal Reserve's decision to rinse interest rates five times since February 1994, I feel it is necessary to persuade Federal Reserve officials to refrain from further interest rate hikes, which I believe they are planning." Gonzalez said in a letter to Clinton.
Analysis expect Fed officials to raise the federal funds rate to 5.25% from 4.757c by the Nov. 15 meeting of the Federal Open Market Committee. A few have speculated that officials might act as soon as the Sept. 27 FOMC meeting.
Gonzalez, a persistent and vocal critic of the Fed in Congress, said he is not advocating micromanagement at the central bank" and acknowledges the Fed's independence. However, he told Clinton, increases in interest rates "are clearly contrary to your hope for a sustained period of economic growth."