Democratic politicians are pressing the Federal Reserve to halt raising interest-rate ahead of its first meeting of the year.
Fed chairman Jerome Powell is expected to announce on Wednesday that the central bank will raise interest rates by another 25 basis points, but some in Congress warn that further tightening of monetary policy will decimate the jobs market and tilt the economy into a recession.
Unemployment remains at 3.5 per cent, a 53-year low. Mr Powell has blamed the historically low unemployment rate as a driver for inflation.
The Fed forecasts unemployment to jump to 4.6 per cent by the end of the year.
“As you know, the Federal Reserve’s dual mandate is promoting maximum employment and maintaining stable prices,” Democratic US senator John Hickenlooper wrote in a letter to Mr Powell.
“Unemployment may be low at the moment but many workers are still struggling as wage gains have not kept up with prices.”
Layoffs have particularly plagued the tech sector as Twitter, Salesforce, Spotify, Amazon, Meta and Alphabet have all announced plans to let thousands of employees go.
Mr Hickenlooper's plea will likely fall on deaf ears as the central bank ignored similar appeals from Senate Banking Committee chairman Sherrod Brown last year.
“For working Americans who already feel the crush of inflation, job losses will make it much worse,” Mr Brown wrote in October.
A letter signed by 12 Democrats in November was similarly rebuffed.
The Fed raised interest rates seven times last year to the range of 4.25-4.50 per cent to address the rising cost of goods.
Should it raise interest rates by 25 basis points on Wednesday, as expected, it would bring the federal funds rate to the range of 4.50-4.75 per cent, roughly 50 basis points short of where the central bank previously forecast rates to peak by this year.
Mr Powell has previously said he wants to see wage growth cool in line with inflation and for the labour market to return to balance. There are currently 1.7 vacancies for every jobseeker.
But in the Fed's effort to deliver a so-called soft landing, Mr Hickenlooper and others fear that the central bank risks pushing the US economy into a recession if it raises interest rates by too much.
Consumer spending in December dipped for the second consecutive month, signalling a weakening of economic momentum. And a Bloomberg survey of economists forecasts employers to have added fewer jobs this month.
Recent government data suggests that inflation is moderating after peaking at 9.1 per cent in the summer, although, at 6.5 per cent, it still remains well above the Fed's long-term 2 per cent goal.
Fed officials have argued against loosening monetary policy too soon but now, faced with weakening economic activity and the risk of a US debt default, they operate under conditions that could upend their soft-landing hopes.