Democratic presidential candidate Bernie Sanders has weighed in on the Federal Open Market Committee’s decision to increase the federal funds rate for the first time since June 2006, strongly criticizing the move.

Photo Credit: Michael Vadon via Compfight cc

Sanders lambasted the Federal Reserve in a scathing editorial in the New York Times, saying “the recent decision by the Fed to raise interest rates is the latest example of the rigged economic system.”

He said bankers were inflating the risk of runaway inflation to justify the interest rate rise.

“Big bankers and their supporters in Congress have been telling us for years that runaway inflation is just around the corner,” Sanders wrote.

“They have been dead wrong each time. Raising interest rates now is a disaster for small business owners who need loans to hire more workers and Americans who need more jobs and higher wages,” Sanders writes. “As a rule, the Fed should not raise interest rates until unemployment is lower than 4%. Raising rates must be done only as a last resort — not to fight phantom inflation.”

Sanders released a separate statement after the Fed announced its decision last week, saying it should “act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago.”

From the New York Times:

“WALL STREET is still out of control. Seven years ago, the Federal Reserve and the Treasury Department bailed out the largest financial institutions in this country because they were considered too big to fail. But almost every one is bigger today than it was before the bailout. If any were to fail again, taxpayers could be on the hook for another bailout, perhaps a larger one this time.

To rein in Wall Street, we should begin by reforming the Federal Reserve, which oversees financial institutions and which uses monetary policy to maintain price stability and full employment. Unfortunately, an institution that was created to serve all Americans has been hijacked by the very bankers it regulates.”

Sanders later calls for widespread reform of the Federal Reserve, saying there should be changes to the way Fed Board Governors members are chosen, alterations to the Fed's monetary policies, and the Fed should be made more transparent.

The Democratic candidate also said that any large bank which is financially assisted by the Fed should be required to “commit to increasing lending to creditworthy small businesses and consumers, reducing credit card interest rates and fees, and providing help to underwater and struggling homeowners.”