Washington, D.C. – Today’s actions by the Federal Reserve Board’s Federal Open Market Committee (FOMC) to increase interest rates by another 25 basis points risks triggering stagflation, combining a recession with inflation.
As I stated previously, raising interest rates further to control inflation is no longer the answer and is instead contributing to an increase in the cost of shelter. The FOMC needs to let the economy absorb the previous rate increases while we focus on increasing housing supply to address skyrocketing shelter costs.
The FOMC’s indication it may step back from taking further action will not address the affordable housing shortage in the country that has been exacerbated by inflation. We need the Administration and Congress to address the critical need for affordable housing in this country and move forward with actions and policies that will increase our nation’s housing supply. Federal support, such as the Neighborhood Homes Investment Act and the Affordable Housing Credit Improvement Act, would create 2.5 million affordable housing units over the next 10 years if enacted.
About David Dworkin: David Dworkin is a former Treasury Department official during the Obama and Trump Administrations and has led the National Housing Conference since 2018.
About NHC: The National Housing Conference is a diverse continuum of affordable housing stakeholders who convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest. Our vision is an America where everyone is able to live in a quality, affordable home in a thriving community. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.