The Federal Reserve is poised to leave its key interest rate unchanged at a time when the Fed faces an economy that has proved resilient but is nevertheless under pressure from surging interest rates, overseas turmoil and anxious investors. U.S.
FILE - Federal Reserve Chairman Jerome Powell speaks at a meeting of the Economic Club of New York, Oct. 19, 2023, in New York. The Federal Reserve is expected to leave interest rates alone when its latest meeting ends Wednesday. But economists will be listening closely to what Chair Jerome Powell says about the possible future path for rates.
Though the Fed has raised its benchmark rate to a 22-year high, it hasn’t imposed any hikes since July. Even so, the yield — or interest rate — on the 10-year Treasury note has kept rising, hitting 5% last week, a level it hadn’t reached in 16 years. The surge in Treasury yields has caused the average 30-year fixed mortgage rate to reach nearly 8% and has also raised the costs of credit cards, auto loans and many forms of business borrowing.
What’s important for the Fed is that the yield on the 10-year Treasury has continued to zoom higher even without rate hikes by the central bank. That suggests that Treasury yields may stay unusually high even if the Fed keeps its own benchmark rate on hold. Many business and consumer loan rates might, in turn, also stay high, helping keep a lid on economic growth and inflation.
“The story of the year so far,” economists at Goldman Sachs wrote, “has been that economic reacceleration has not prevented further ... progress in the inflation fight.”
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Why Treasury's borrowing needs could overshadow the Federal Reserve decision‘We are running outsized deficits for an economy at full employment,’ said Gregory Faranello, head of U.S. rates for AmeriVet Securities in New York. ‘This has market participants concerned.’
Read more »
Today’s Federal Reserve: A Faith-Based OrganizationNobody knows whether Fed decisions matter, but people act like they do. They do so on the basis of faith, not facts.
Read more »
Stock market today: Asian shares slip after S&P 500 slips ahead of Fed interest rate decisionAsian shares are mostly lower ahead of a Federal Reserve decision this week on interest rates.
Read more »
Stock market today: Asian shares slip after S&P 500 slips ahead of Fed interest rate decisionAsian shares are mostly lower ahead of a Federal Reserve decision this week on interest rates.
Read more »
Why the U.S. rates surge went worldwideThe higher-rates-for-longer is sending ripples across major economies
Read more »
Jets not counting on trade deadline help as pair of offensive linemen hit injured reserveWith the trade deadline nearing, the Jets sure could use an offensive lineman. Instead, they’ll likely just have to figure it out with who they have.
Read more »