October 30, 2008

Statement of Chairman Dodd on Federal Reserve Rate Cut

“Today's interest rate cut is a welcome step to the extent that it facilitates the unlocking of our credit markets so that businesses can continue to operate and American families are able to afford homes, cars and to send their children to college.  Recent rate cuts, including today's, also underscore Chairman Bernanke's foresight in rejecting calls by other Federal Reserve Governors to raise interest rates several months ago.
“However, this action alone will not solve our current economic problems.  The key to our economic recovery is in addressing the root cause of this crisis - the housing crisis.  Federal agencies and financial institutions must do more to modify the mortgages they hold in order to stop foreclosures and help families keep their homes. 
“Interest rate cuts must be used in conjunction with other tools Congress has provided, including authority granted by the Emergency Economic Stabilization Act.  The Bush Administration must ensure that the funds provided through this law are used for job-creating purposes, including lending, and not for unproductive and unacceptable purposes like bonuses for executives and golden parachutes.”