Here are the top stories from the noon newscast on November 1, 2023.
Since launching the most aggressive series of rate hikes in four decades in March 2022 to fight inflation, the Fed has now raised rates only once since May.FILE - Federal Reserve Chairman Jerome Powell speaks at a meeting, Oct. 19, 2023, in New York. WASHINGTON — The Federal Reserve kept its key short-term interest rate unchanged Wednesday for a second straight time but left the door open to further rate hikes if inflation pressures should accelerate in the months ahead.
“Tighter financial and credit conditions for households and businesses," it said, “are likely to weigh on economic activity.” Economists at Wall Street banks have estimated that sharp losses in the stock market and higher bond yields could have a depressive effect on the economy equal to the impact of three or four quarter-point rate hikes by the Fed.
Market analysts say an array of factors have combined to force up long-term Treasury yields and couple with the Fed’s short-term rate hikes to make borrowing costlier for consumers and businesses. For one thing, the government is expected to sell potentially trillions of dollars more in bonds in the coming years to finance huge budget deficits even as the Fed is shrinking its holdings of bonds. As a result, higher Treasury rates may be needed to attract more buyers.
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